Misrepresentation In Insurance Claims
Misrepresentation is a false statement of fact. In insurance law, material misrepresentation occurs when an individual provides false information in his or her application for coverage that, if provided truthfully, would have impacted the insurance company’s decision to issue the policy.
- FRAUDULENT MISREPRESENTATION When an individual provides false information intentionally, meaning that they know it is not true.
- INNOCENT MISREPRESENTATION False information believed to be true by the individual.
- MATERIAL MISREPRESENTATION Failure to disclose or that the applicant lied about a material fact in their medical or personal history that would have resulted in the policy never being issued from the outset.
What is the “Contestability Period”?
When an application is approved, and the policy is issued, the policyholder is then subject to a contestability period, typically lasting two years. During the contestability period, the insurance company is allowed to deny a claim if there was a misrepresentation regarding any of the information provided on the application for insurance, even if the misrepresentation was due to an oversight or error.
After two years have elapsed from the issuance of the policy, the misrepresentation must be fraudulent, which means that the erroneous information was provided either deliberately or recklessly. At this point, the burden of proof is on the insurance company to provide evidence of fraud.
Whether the misrepresentation in question is innocent or fraudulent, at the end of the day it can result not only in a denial of benefits; it can also render a contract void.
Why are Insurance Policies Denied?
Every day, countless disability, critical illness and life insurance claims are denied and policies terminated on the basis of misrepresentation. Not all of these denials are legitimate, as often, the questions on insurance applications can be deliberately confusing and ambiguous. Or the information in the policyholder’s medical records are incorrectly interpreted by the insurance company.
It is critical to consult with an experienced insurance lawyer before accepting the insurance company’s denial of benefits.
If your insurance claim has been denied, contact Share Lawyers and put our experience to work for you. We offer free consultations and there are no fees unless we win.