A prudent insurance agent and the insurer represented by the agent, were found not liable for false statements on an application for insurance that caused an insured to lose coverage because the agent and insurer were able to prove that the insured did not read the application. In Owensby v. State Farm Fire and Casualty Co., No. E2008-01763-COA-R3-CV (Tenn.App. 09/15/2010), the Tennessee Court of Appeals explained the danger of failing to read an insurance application before signing it by sustaining a summary judgment in favor of the insurer and the agent.

Related: Read Barry Zalma's October column, "'Illegal rescission' is oxymoron"

Cecilia and Charles Owensby ("Owensby") had a homeowners' insurance policy issued by State Farm Fire and Casualty Co. ("State Farm"). After their house burned down, the Owensbys filed a claim pursuant to the policy. State Farm eventually denied the claim, asserting that Cecilia Owensby had made four material misrepresentations when applying for the insurance and that each of these misrepresentations increased State Farm's risk of loss. The Owensbys asserted that any inaccurate information contained on the application was the fault of the insurance agent who filled out the application on Cecilia Owensby's behalf. The Owensbys sued both State Farm and Darius Miller ("Miller"), the insurance agent. State Farm and Miller filed a motion for summary judgment, which the trial court granted.