Insurance Policy Applications
Honesty is the best policy
An Application for an Insurance can (and will be) used against you
You have insurance, whether car insurance, homeowners’ insurance or life insurance. You may not recall when you purchased it, but you filled out an Application for Insurance. The information in this application is very important. You may not have paid too much attention when you filled it out, but it may prove very important if you have a claim. An insurance company is happy to take your money to pay the premium each month, but it does not like when it has to pay a claim. That’s the nature of insurance companies: collect more premiums and pay less claims equals profit. When you make a claim, an insurance company will first look to see if it is legally obligated to cover your claim. This is where your Application for Insurance comes into play.
Let’s say you have car insurance and you are in an accident which is your fault. You expect your car insurance to pay for the other person’s car repair and/or injuries. But, what if you have a teenager living in your house which you don’t list on the Application for Insurance? For those of you who don’t know, having a teenager increases your insurance premiums. If you don’t list the teenager, and even if the teenager was not driving, your insurance company may deny coverage for a misrepresentation in the insurance policy. How about if your mother-in-law moves in with you? This must also be disclosed to your insurance company. It doesn’t matter that your in-law did not cause the accident, an insurance company may use this to deny you coverage. They will argue any misrepresentations go to the risk they are insuring and would affect the premium they would have charged, i.e. if we knew a teenager lived with you, we would have charged a higher premium.
When you apply for homeowner’s insurance, they ask many questions which may affect your insurance premium. If your dog bites someone and you did not disclose you had a dog when you applied for homeowners’ insurance, the insurance company may deny coverage. If someone is injured in your pool and you told the insurance company you did not have a pool, they may deny coverage. I do not mean to cause undue alarm, but you need to be sure you do not mislead the insurance company when you apply for insurance because they will look for an excuse to deny coverage at any opportunity.
If you apply for life insurance, you must answer all of their questions accurately and completely. Once again, an insurance company will look for reasons to deny coverage. If they discover you went to the doctor with chest pains and you did not disclose it, they may deny coverage. If you were on a prescription medication and did not include it in your Application for Insurance, they may deny coverage. You may need to order your own medical records to refresh your memory of past doctor visits.
What does it mean if an insurance company denies coverage?
You pay your premium to an insurance company in the expectation that they will pay a claim if it arises. When an insurance company denies coverage, that means they will not cover you for that claim. This is different than if someone makes a claim and you are not legally responsible. For example, someone sues you and it is not your fault; an insurance company will cover the claim and defend you even if it is not your fault. When an insurance company denies coverage, that means they will not cover the claim and will not defend you, whether you are legally responsible or not! Even if you are not at fault, you still need to defend yourself and if your insurance company denies coverage and does not defend you, you can be held legally responsible even if it was not your fault, simply by failing to defend yourself.
We have handled many cases against insurance companies forcing them to provide coverage in a case. If there is no insurance coverage, often there is no recovery for our clients. With some claims, there is no dispute over who is at fault and no dispute over the injuries, the dispute arises whether the insurance company must cover the loss and the damages. Once again, an insurance company will look for reasons to deny coverage so as to avoid paying an otherwise valid claim.
Whenever you make an Application for Insurance, be sure to answer the form truthfully and completely. It may make the difference between being covered by insurance or being left to defend yourself. McCready Law represent people in claims against insurance companies for both personal injuries as well as work injuries.