When filing a claim, the insured individual needs to be honest with the insurer about the incident. Obviously, once cannot intentionally cause their home on fire and then claim it was an accident. This is because typical policies only cover accidental fires, not intentional ones.
But just as the insured must be honest with the insurer, the insurer has a duty to be honest with the insured. Unfortunately, some insurance providers provide policyholders with misleading information. If you are insured, here are some common insurance broker misrepresentations of which you should be aware.
Why Insurance Brokers Might Make Misrepresentations
A discussion about the difference between insurance agents and insurance brokers may be helpful. Both are licensed to sell insurance. An agent typically works with one firm or a very small number of companies. A broker oftentimes works with a large number of companies.
An insurance broker typically represents the consumer who is trying to get coverage. They then will turn the application over to the actual company to finish the transaction. Even though the insurance company completes the application, a broker should still be honest about what the policy covers rather than concerned with making the sale.
Types of Material Misrepresentations
Insurance providers must be honest about the terms and conditions of coverage that are “material.” Below are examples of two types of material misrepresentations.
Claiming that Certain Things Are Covered When They Are Not
An insurance company representative will typically discuss the coverage with the individual seeking it. While simply misunderstanding the scope of coverage can be found to not be a defense against something not being covered, the case can be different if an insurance provider says something is covered when it is not or does not correct the prospective insured individual’s misunderstanding.
For instance, suppose a homeowner has a detached garage with valuable possessions in it. If the homeowner is clear that they need coverage for the home and the detached garage, and the insurer claims that such coverage is included when it is not, the homeowner may potentially be found to have relied on that misrepresentation when purchasing the coverage.
Claiming that You are Not Covered When You Actually Are
The misrepresentations do not end once you have accepted the policy. Using the same example from above, what if the garage is covered, but then the claim is denied by saying that the garage does not count under the terms of the policy? They may refuse to pay any money, say they do not owe you anything at all or they can decide to pay a small amount of what is owed.
What Can You Do About Misrepresentations?
If you believe your insurer has made misrepresentations about your coverage, you have options. First, contact a homeowner’s insurance lawyer and explain what happened in your case. They can review the contract and determine what misrepresentation, if any, has occurred and whether it is material.
A court will potentially consider the conversations the prospective insured and insurance broker had before entering into a contract. This is one reason why it can be important to document conversations about coverage, especially if you need coverage for a specific item or piece of property. If it is apparent that you requested coverage and did not get it, you may have recourse to be compensated.
Speak to a Homeowners’ Insurance Attorney
Contact our office today at 321-283-5888 to speak with one of our homeowners’ insurance attorneys if you would like to discuss the particulars of your situation. We present the material contained on our website and pages, including this Blog, for general informational purposes only. It does not constitute the rendering of legal advice and does not create any attorney-client relationship. If you need legal or other professional advice, you should consult with legal counsel about your particular facts and circumstances.
If you have questions or concerns about the handling of your insurance claim, contact one of our homeowner’s insurance for a consultation.