Sarah is applying for and managing various insurance policies. Under general insurance contract law, which of the following situations would give the insurer the legal right to void a policy or deny a claim? (Select all that apply)
- Sarah intentionally fails to disclose a previous major fire loss when specifically asked about prior claims on a homeowners insurance application.Cevap
- Sarah breaches a strict guarantee written into her commercial property policy requiring that a central fire alarm system be maintained at all times.Cevap
- CSarah states her insured vehicle is dark blue when it is actually black, a fact that has no impact on the premium or the insurer's underwriting decision.
- DSarah's insurance producer notices a minor spelling error in her street address and corrects it on the application without having Sarah initial the change.
Cevap
The insurer can void the policy if Sarah intentionally fails to disclose a previous major fire loss, or if she breaches a strict guarantee to maintain a central fire alarm system.
An insurer has the legal right to void a policy if the applicant engages in material concealment (intentionally hiding significant information like a past fire loss) or breaches a warranty (an absolute guarantee written into the contract, such as maintaining a required alarm system). Both actions severely impact the agreed-upon risk.
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Grounds for Voiding an Insurance Contract: Material Concealment and Breach of Warranty
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