If your home is damaged in a hurricane or fire, prompt handling and full payment of your homeowner’s insurance claim can mean the difference from having your home and personal property fully repaired or replaced and severe financial loss. When homeowner’s insurers refuse to handle claims in an expeditious manner, the financial hardships experienced by the owner of the home can be devastating. Although a policyholder might have paid all premiums on time for years, this does not mean that the insurance company will fulfill its contractual obligations when a claim is filed. Insurance company profits are predicated on denying claims and minimizing the amount paid out on such claims. When a policyholder submits a claim following notice of a loss, the insurer will initiate an investigation of the claim to identify viable policy exclusions. This investigation often starts with the initial insurance application. Information provided when completing an insurance policy application can constitute a basis not only to deny a claim but also to rescind (retroactively cancel) the entire policy.
Although even unintentional misrepresentations or mistakes in completing a homeowner’s insurance application can justify denial or rescission, insurance carriers do not get to automatically deny a claim merely because information provided on the application is untrue or misleading. The key consideration in terms of the impact of inaccurate information on a policy application involves whether the false or omitted information was material to the insurer’s decision to issue the policy or to the determination of the amount of the premium and other terms.
Florida Statutes §627.409 specifies that misrepresentations and omissions can justify rescission of a homeowner’s insurance policy and/or denial of a claim under the following circumstances:
- The misrepresentation, concealment of fact, omission or inaccurate statement is fraudulent or material to the risk assumed by the insurance carrier; or
- The insurance company would not have issued the policy with respect to the peril that caused the loss if the actual facts had been known to the insurer.
An example of how the question of the “material” nature of a non-disclosure or misstatement can impact a homeowner’s claim was recently addressed by the Florida 2nd District Court of Appeals (DCA) in Mora v. Tower Hill Prime Insurance Company. In Mora, the insured filed a claim related to sinkhole damage several years after the purchase of a homeowner’s policy, which included coverage for this peril. When the insured completed the policy application, the policyholder denied knowledge of prior “cracking damage” that have been repaired.
During discovery in the breach of contract lawsuit, the insurer obtained documents that it claimed established the insured’s knowledge of facts that made the “cracking damage” response false. An inspection form associated with the insured’s purchase of the property disclosed cracking around the pool and a large ceiling crack. Notations on the report also referred to other minor crack repairs around the premises including minor cracks in drywall or stucco on the premises. The insured testified during his deposition regarding his lack of recollection of the information at issue in this document nor the handwritten notations.
The insurance company sough summary judgment based essentially on these documents and an affidavit from an insurer representative asserting the policy would not have been issued had the insurer been informed of these repairs. The 2nd DCA advanced the commonsense position that minor cracks in stucco and drywall would not have a material impact on the decision to issue a homeowner’s policy or the determination of the amount of the premium. The court correctly pointed out that if minor cracks of this kind justified denying coverage, most homeowners would not have homeowner’s coverage.
Greenberg Stone and Urbano: Seeking Maximum Recovery for Damages Sustained Due to Negligence
If your home is damaged by a fire, severe storm or other covered peril and your insurance company refuses to pay your claim, our Florida Homeowner’s Insurance Claim Lawyers at Greenberg Stone and Urbano will tenaciously pursue the full compensation you deserve. For over 130 collective years, our firm has assisted accident victims in personal injury and wrongful death actions across South Florida. We seek to obtain compensation for your tangible and intangible damages, including medical bills, lost wages, pain and suffering, and more. Our skill and dedication has earned us an AV rating from Martindale Hubbell and recognition as one of South Florida’s top firms by the Miami Herald. Call us at (888) 499-9700 or (305) 595-2400 or visit our website to schedule your initial consultation.