How Can My Insurance Company Deny My Claim?There are numerous ways for the insurance company to deny your claim. One of their favorite and most frequently used is to assert a legal defense known simply as “misrepresentation.” The defense of misrepresentation is derived from Florida Statutes Section 627.409, which allows insurance carriers to cancel your coverage if they can show a misrepresentation in an insurance application that is material to the risk insured. F.S. 627.409(1)(a). The key here is that the misrepresentation must be “material.” A material misrepresentation exists if the insurance carrier is able to show that a different premium would have been charged for coverage had the actual facts been revealed in the application. F.S. 627.409(1)(b). An obvious illustration of a material misrepresentation would be if a car insurance application asked the applicant if they had been involved in any prior accidents, and the applicant answered “no” despite the fact they had been involved in five accidents over the last two years. Understandably, the premium paid by an individual involved in five prior accidents would be higher than an individual with no prior accidents, as they are more of a risk to the insurance company. As a result, a material misrepresentation exists and the insurance company has the option to cancel the coverage and deny any claims. Unfortunately, the defense of material misrepresentation is not always this clear cut. The scenarios where this defense can come into play are limited only by the imagination of the insurance companies and the application questions they conjure up. Some common—less than obvious—illustrations where this defense is used include misrepresentations as to whether the vehicle was garaged or not, whether the vehicle had an alarm system, or whether the vehicle was modified (which could be as minor as aftermarket tires). If the applicant's answers to questions of this nature are in any way inconsistent, their coverage can be denied for a claim—even if there is no connection between the answer and the accident. Yes, a claim for damages stemming from a fender bender can be denied because you stated that your vehicle was garaged when it may not have been.
What if My Material Misrepresentation was Unintentional?Unfortunately, intent is not a factor considered by the courts when the defense of material misrepresentation is raised. If you find this hard to believe, you're not alone. Most cases where this defense is raised involve innocent customers who made a mistake on their application. The applicant usually filled out their insurance application with little to no help from the insurance company. The questions they answered were either confusing or open to interpretation and they simply did not answer them the way the insurance company wanted them to. Yet they were required by law to answer them so as to not affect the insurance company's calculation of their premium. This is quite the charge considering most of us have absolutely no experience in insurance, and we certainly cannot predict what the insurance company is thinking when they calculate our rate. This problem is further compounded by the fact that the insurance company is under no obligation to investigate the applicant's answer, but they retain the right to verify the answers at any time. This means they usually don't investigate until doing so is advantageous to them. The bottom line is that for insurance companies, ignorance is bliss. The law allows them to approve your coverage after little to no investigation into your qualifications, then allows them to cancel your coverage at any time if those answers do not conform with what they want. This puts most insured at a severe disadvantage when it comes time to make a claim on their insurance policy. It is best to educate yourself on the law that governs the insurance claim process to try to level the playing field against your insurance company, but sometimes this is not enough. If you find yourself in a battle with your insurance company, it may be best to contact a law firm that has experience dealing with insurance companies on a daily basis. The skilled and knowledgeable attorneys at Dolman Law Group Accident Injury Lawyers, PA may be able to represent you throughout your insurance claim and help you to obtain the coverage you paid for and deserve. For more specific information about the current coronavirus pandemic and business closures speak with one of our covid-19 business interruption insurance attorney.
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