Material Misrepresentation and Insurance
Reviewed by Michael P. Maddux, Esq. | Board Certified Criminal Trial Lawyer | Florida Super Lawyer for 16 Consecutive Years
Misrepresentation on your auto insurance application can cost you your coverage entirely, even after you’ve paid premiums faithfully for years. Insurers will refund your premiums when they determine that you have made a material misrepresentation when applying for coverage under your auto policy.
Why Insurers Refund Premiums After Misrepresentation
This means insurers will not provide any payments for the accident you were in while under the policy for which you were faithfully paying premiums. Two major forms of misrepresentation can result in your insurance company refunding your premiums and denying coverage for your claim.
Rideshare Work Is a Common Trigger
The first and most common trigger is performing any sort of rideshare service in the insured vehicle. Uber, DoorDash, Lyft, and similar services all count. If you don’t inform your carrier that you use your insured vehicle for these services, insurers will consider it a material misrepresentation and deny coverage for your claim.
Undisclosed Household Drivers Are Another Trigger
The second common way people lose coverage is by failing to disclose individuals of driving age, over 15, living at the same address. When you apply for car insurance, the carrier needs to know who else will have access to your vehicle. This means you must list or formally exclude all household members of driving age. You cannot simply leave them off the application. Whether it is your wife’s uncle, a roommate, or your brother crashing on your couch, you must disclose anybody of driving age living at your address to prevent the risk of coverage being denied when you need it most.
Examinations Under Oath Can Expose Undisclosed Facts
Insurance companies have the right to conduct Examinations Under Oath before determining whether coverage applies to your claim. These generally last over an hour, with an adjuster asking you questions about the accident, the treatment you received, and background questions that will absolutely cover who lives at your address and whether you used your insured vehicle for a rideshare service. These are sworn statements, and insurers can use them later in a lawsuit to hold you to your answers or impeach you if your answers change. If you neglected to inform them of these circumstances, you will be left with the choice of telling the truth and losing coverage, or lying and perjuring yourself.
Don’t put yourself in this position. Disclose any rideshare work or residents over the age of 15, even in the middle of a policy period. If you have questions about your coverage or a denied claim, our office can help.