| Added On February 4, 2010
If you lie on an application for auto, life, health or disability insurance, you
may find yourself without much-needed coverage. Unfortunately, some people, in
an effort to reduce their premiums, grossly misrepresent the facts.
In January, the Supreme Court of Virginia upheld the denial of benefits to be paid to
a seriously injured automobile accident victim, because the owner of the car in
which the victim was injured had failed to disclose all of the potential drivers
who were living at the household and might have access to the car. The court
ruled that there were several places on the application where this question was asked
and each time the policyholder failed to disclose that a 21-year-old relative was
living in the house.
That 21-year-old relative was the driver of a car in a single-car accident that seriously
injured its passenger, costing hundreds of thousands of dollars in medical bills.
When her claim was made to the insurance company, there was an investigation and
the insurance company ultimately denied coverage because it said that had it known
of the young driver, it likely would have sold the policy at a substantially higher
price. The Supreme Court ruled that this was a material misstatement of fact which
nullified the policy.
Unfortunately, over the years families have been left financially devastated when
someone bought medical or life insurance benefits and failed to disclose relative
past medical history. We can guarantee you that after you’re gone, the insurance
company will investigate the truthfulness of your application and if it finds that you
made material misrepresentations, your widowed spouse will be coming to our
firm, but we will be telling her that we can’t help her and the children.