Insurance brokers, who represent the insured to transactinsurance with, but not on behalf of insurers, often will try tomake the process easy for the insured by filling out theapplication before asking the insured to sign it. It is a practicefraught with danger that can cause the insured to have no coverageat all and may make the broker a defendant in a major lawsuit.That's just what occurred in a recent California case.

In December 2010, Jerry and Betty Douglas went to a businesscalled Cost–U–Less Insurance where an InsZone Insurance Servicesemployee assisted them in obtaining a Homeowners' insurance policywith Fidelity National Insurance. The insurance paperwork JerryDouglas signed consisted of three pages; the first page was a blankform. The employee at Cost–U–Less did not ask him any questionsabout the property.

Three months later a fire damaged the Douglases' home. After aninvestigation, Fidelity rescinded their Homeowners' policy. TheDouglases received a letter from an attorney that included a checkfrom Fidelity in the amount of the insurance premium that theDouglases had paid. The attorney stated that in the course ofinvestigating the fire loss, evidence showed materialmisrepresentations had been made in connection with the Douglases'insurance application.