Our firm has battled insurance companies for many years, and we’ve seen firsthand the tactics they use to delay and deny claims. That being said, if you lie on an application for auto, life, health or disability insurance, you open the door for your insurer to legitimately deny you coverage, just when you need it the most.
West Virginia law (W.Va. Code § 33-6-7), like most states, provides that if you misrepresent material facts in an insurance application, or even innocently omit material information, coverage may be denied.
A recent and harsh example of this occurred last year in Virginia where the Supreme Court upheld the denial of benefits to a seriously injured automobile accident victim because the owner of the car in which the victim was injured failed to disclose all of the potential drivers who were living at the household and might have access to the car.
The court ruled that there were several placed on the application where this question was asked and each time the policyholder failed to disclose that a 21-year-old relative was living in the house. That 21-year-old relative was the driver of the car in a single-car accident in which a passenger was seriously injured, costing hundreds of thousands of dollars in medical bills. When her claim was made to the insurance company, there was an investigation and the insurance company ultimately denied coverage because it said that had it known of the young driver, it likely would have sold the policy, but at a substantially higher price. The Supreme Court ruled that this was a material misstatement of fact which mollified the policy.
The lesson: Be completely honest on your insurance applications.