July 2014 Dec Page

Article of the Month

An insured's misrepresentation in obtaining coverage or fraud involving the policy can void coverage; in fact, due to the phrasing of many misrepresentation and fraud clauses, the acts of any insured, and not just the named insured, can have the effect of voiding insurance coverage. Courts generally uphold these policy provisions. Furthermore, statutes in many states allow the insurer to deny recovery under a policy where the misrepresentation is fraudulent, material to the acceptance of the risk or to the hazard assumed by the insurer, or where the insurer in good faith would not have issued the policy if the true facts regarding the risk had been made known to the insurer.