The Duty To Inform Your Insurer


Insurance policies come with many rules and exceptions. One firm rule is that the insurance company must always be notified when the number of drivers in a household changes. A recent case detailed how the alleged failure of one Illinois family to follow this rule resulted in denial of insurance coverage following an accident.

In the case, Mrs. D applied for an auto insurance policy. She was asked if there were any operators in the household under the age of 25. She told the insurance company that the only operators were husband and herself. When Mrs. D was issued the policy, the conditions stated that the policy could be rescinded if the insured misrepresented any information that could materially affect the risk assumed by the insurance company.

On her application for insurance, Mrs. D allegedly failed to inform the insurance company that her minor son, would be receiving his drivers’ permit soon. He received his permit about one month after the application was filed. Mrs. D also allegedly failed to inform the insurance company that her son was an operator in her household on subsequent applications to amend the policy for coverage of different vehicles.

He got into two car accidents after the policy was issued, one of which resulted in an injury to one of his passengers. When Mrs. D reported the accident to the insurance company, she was told her policy had been rescinded. A lawsuit was filed after the accident. One part of the suit involved deciding whether it was proper for the insurance company to rescind the policy. The court concluded that the rescission of the policy was warranted because Mrs. D made a “material misrepresentation” to the insurance company when she failed to name her son as a minor household driver. The court found that Mrs. D had numerous opportunities to inform the insurance company that her son was an operator and had been adequately notified that certain omissions of information could result in cancellation of the policy.

If you have a new driver in your home, be proactive and inform your insurance company. This case also points out the larger rule that the insured is required to provide full and truthful information in an insurance application or request for renewal of an insurance policy. Failure to do so can result in a denial of insurance coverage when you may need it most. You should review your insurance policies and application to make sure that all information provided to the insurer is correct when made and up to date. If you have questions about a policy, a lawyer can help you understand your rights and obligations under the policy.

This article is intended to present general information for educational purposes, is not legal advice and should not be relied upon in connection with any particular matter. The reader is advised to immediately retain their own separate legal counsel with respect to any specific legal issue. Rights to bring a claim will expire through the passage of time by the applicable statute of limitations.

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