A notice of foreclosure with a set of keys on top of it. On appeal, Taylor argued that the phrase “had a foreclosure” either unambiguously refers to a foreclosure sale or is ambiguous and should be construed in her favor. (Credit: zimmytws/Shutterstock.com)

In a dispute over alleged material misrepresentations in a homeowners insurance application, the U.S. Court of Appeals for the Eighth Circuit examined the meaning of the question whether an insurance applicant had “had a foreclosure.” In Hiscox Dedicated Corporate Member, Ltd. v. Taylor, 53 F.4th 437 (2022), the Eighth Circuit held that question to be ambiguous and construed it against the insurer. The court reversed and remanded for the Western District of Arkansas to continue sorting out the dispute.

Suzan Taylor owns residential property in Hot Springs National Park, Arkansas. In early 2018, Taylor worked with an independent insurance agent to apply for home insurance from Hiscox Dedicated Corporate Member Limited. Taylor and her agent completed an industry-standard application form which included the following question: “Has the applicant had a foreclosure, repossession, bankruptcy or filed for bankruptcy during the past five (5) years?”

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