Misrepresenting a Material Fact on an Insurance Policy Allows Insurer to Rescind

Misrepresenting a Material Fact on an Insurance Policy Allows Insurer to Rescind

Read the full article at https://www.linkedin.com/pulse/misrepresentation-insurance-application-cost-insured-barry and at https://zalma.com/blog plus more than 3900 posts.

Howard “Anthony” Jesmer (Jesmer) appealed the grant of summary judgment against him in this insurance coverage dispute. Jesmer argued that the district court erred in concluding that his answer to a question on an insurance application rendered his policy void under Tennessee law. In Howard Anthony Jesmer v. Erie Insurance Company, No. 21-5186, United States Court of Appeals, Sixth Circuit (September 30, 2021) reviewed what is needed to rescind a policy in Tennessee.

ZALMA OPINION

People who acquire insurance by misrepresenting material facts forget that the covenant of good faith and fair dealing devolves equally on the insured as it does on the insurer. In this case Jesmer failed to inform the insurer, in good faith, of the risks of loss he asked it to take. The underwriter’s testimony established that the misrepresentation was material to the insurer who would have refused to insure Jesmer if it knew that he was conducting a business on the premises, a risk greater than that of a normal homeowner who does not store tow trucks and damaged vehicles on the premises. He was, therefore, his worst enemy.

© 2021 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.

He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 54 years in the insurance business.

He is available at http://www.zalma.com and zalma@zalma.com. Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award. Over the last 53 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

Go to my articles at https://zalma.substack.com, the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma; Go to Barry Zalma videos at https://www.rumble.com/zalma ; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to the Insurance Claims Library – https://zalma.com/blog/insurance-claims-library/ The last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud-letter-2/ podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4