I make my insurance payments, so why won’t my insurance company pay my claim? That’s a question many individuals ask themselves after their claim gets denied by the insurance company. Sometimes, the insurance company will try to avoid paying your claim by accusing you of having materially misrepresented information on your application for your policy of insurance. This defense, often called “Material Misrepresentation” is when an individual misrepresents, conceals, or omits material facts about past claims or household members at the time of filling out an insurance application. When the insurance company thinks you may have done this, it will deny your claim, even if you had paid your premiums for years.
The purpose of the insurance application is for the insurance company to obtain information to be used by its underwriters to determine the risks and the cost of issuing an insurance policy. This allows the underwriter to balance your risk and determine how much in premiums you should be paying for insurance. Misrepresentations or concealments of material facts listed in the application made by an insured before a loss can result in the insurance company rescinding the contract. This means that it renders the policy as though it never existed and coverage never applied. Misrepresentations and Concealments made after a loss can result in the insurer denying coverage of claims submitted. This is why it is important that you don’t rely on online applications or insurance agents to explain to you the terms of the application. Insurance companies can collect your premiums and payments for months or even years, but once a claim is made will look into your personal information to find a reason to deny coverage and use your own application against you.
There are a number of matters for which an insurance companies may consider a misrepresentation if not disclosed. The most common include: prior car accidents where a claim was made; garaging your auto at a different location than the one disclosed in the application; and failure to list individuals in your household who are of driving age. For example, if your child is over the age of 14, it might not matter that he or she does not have a learner’s permit or license, you will still need to disclose them in your application. It is important to note that if the insurance company fails to request the information in the application, said information may be considered immaterial and you would not be expected to volunteer that information. Therefore, make sure you read the questions in the application thoroughly.
It is true that most applications are lengthy and confusing and we often depend on the insurance agent to explain to us the terms of the contract. However, it is not in their best interest to explain to you the loopholes to denying coverages, neither are they aware of these loopholes. Insurance agents are paid to sell insurance policies, not to protect you at the time of a loss. Protect yourself by paying attention to the questions listed in the application to avoid being denied coverage on a basis of a material misrepresentations you weren’t aware of.
If your insurance company is denying your claim, or if the insurance company will only inform you that it is conducting an investigation, then call us, Pacin Levine at (888) 450-4909.