MAKE SURE YOUR APPLICATION FOR INSURANCE IS ACCURATE OR ELSE!

The First District Court of Appeal (Florida) recently held that an 'unintentional' misrepresentation during the application of an insurance contract would void the contract and the coverage it provided. Universal v. Johnson, 114 So. 3d 1031 (Fla. 1st DCA 2013).

On March 13, 2008, an accidental fire destroyed the Johnsons' home. The opinion indicates that Mrs. Johnson failed to disclose that she had been convicted of a felony. Universal Property and Casualty Ins. Co. claimed that it would not have issued the home owner's policy had it know of Mrs. Johnson's prior criminal convictions. Florida Statutes, in short, state that a misrepresentation or omission (failure to disclose), may prevent recovery under the policy if (1) the misrepresentation was made fraudulently or was material to the acceptance of the risk or the hazard assumed or (2) had the true facts been known by the insurance company, the insurance company, in good faith, would have denied the application.

On appeal, the Johnsons contended that the misrepresentations were unintentional and, therefore, should not void coverage. The First District Court of Appeal held that the policy, nor the statute, required evidence that the Johnsons intentionally misrepresented Mrs. Johnsons' prior criminal history. Thus, because neither the contract nor Florida statutory law requires that a misrepresentation be intentionally made for the contract to be voided, the First District Court of Appeals held that the trial court erred in granting summary judgment against Universal.

What to take away from this case...make sure, to the best of your ability, that your application for insurance is ACCURATE!