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Car Insurance Coverage Defenses

Did Your Car Insurance Company Deny Coverage?

Are you being accused of lying on your car insurance application?

Getting into a car accident is terrifying for many reasons, even if you walk away with nothing more than a scratch. There is so much uncertainty. How will you pay to repair or replace your car, pay for your medical care, or pay for the other person’s personal injuries or property damage? You’d like to think that the damages will be covered by your insurance company.

But, if there’s one thing insurance companies don’t like, it’s paying out claims. After you submit a claim if the insurance company believes you’ve misrepresented any of the facts on your policy application, there’s a good chance they will deny coverage. Of course, if this happens you are stuck with the burden of having to pay out of pocket all of the costs associated with the accident (except your medical care, provided you have health insurance).

What Constitutes a Misrepresentation on Your Car Insurance Application?

Florida law refers to misrepresentation as an ‘omission, concealment of fact, or incorrect statement.’

In Florida, there are 7 misrepresentations the insurance company will look for:

  1. The condition of your vehicle
  2. Where you keep your vehicle when it’s not being used
  3. Whether other drivers are driving the vehicle
  4. If your child who’s at college in another state is the primary driver
  5. If a child in the household is driving the vehicle
  6. Your marital status
  7. Whether you or the vehicle were in a car accident

Misrepresenting any one of these seven facts on your application, however, does not automatically mean you won’t receive the coverage you are owed under your insurance company. Your insurer also has to prove that the misrepresentations were:

  • Fraudulent
  • Material to the risk assumed by them
  • That they, in good faith, would not have issued the policy or would have done so on different terms had they known the true facts

If knowing any of the true facts would have led them to issue you a different policy with a higher premium – if the insurance company lost money – expect them to deny coverage (or assert a coverage defense).

What if You Misrepresented Information but The Mistake Was Accidental?

Mistakes happen. As long as you can show the mistake wasn’t material or fraudulent you should be ok. However, if the insurance company can prove to a Florida judge that they would have otherwise changed your policy (charged you more, or excluded certain coverage) or not issued you a policy at all, they can claim a coverage defense – even if the misrepresentation was unintentional.

Insurance Companies Can’t Go Looking for a Misrepresentation of Facts as a Way to Get Out of Paying Claims

Under Florida law, insurance companies can’t actively look for reasons to deny coverage as a means of avoiding paying claims. Only if the insurance company believes they have actual or constructive knowledge that you lied on your insurance application can they assert that claim.

And that’s not the only rule car insurance companies have to follow. If the insurer finds what’s believed to be a misrepresentation, they have to act immediately and void the coverage. This includes not only disclaiming any future coverage but also returning the premiums they received from you from the time they first noticed the misrepresentation.

Furthermore, if your insurance company finds a reason to believe you lied on your application but keeps it quiet – meaning they continue to collect premiums from you – any coverage defense they try to assert will likely be unsuccessful. The same holds true in an instance where they believe a misrepresentation took place but they renew your coverage, under the same terms, anyway.

With all of this said, just because the insurance company believes they have the information they need to deny coverage, it doesn’t mean you have to accept that outcome. There is plenty of case law that protects policyholders from innocent mistakes and from insurance companies acting unreasonably (or in “bad-faith”).

What Should You Do if Your Car Insurance Denies Coverage?

If you’ve been involved in a car accident and your insurance company denies your claim, a good piece of advice is to speak with a personal injury lawyer. An experienced lawyer will know how to prove to the insurance company and the court that you submitted your insurance application with material facts that were true or the information that was incorrect was not a material misstatement.

Most personal injury lawyers, like Alan Sackrin, will offer a free initial consultation (over the phone or in-person) to answer your questions.


Do You Have a Question?

Please fill out the “Talk With An Attorney” form above to ask a question or you can call Alan Sackrin at 954-458-8655.  He promises to get back to you promptly.  Ask now.