Concealment of correct residence

[johnwb50]

I was involved in a car accident. The other driver has reported for years he lived in Roseville, CA to avoid the higher insurance rates in Sacramento,CA. Doesn't his act of concealing his correct Sacramento address void his contract with his insurance company?

Any idea where in the California insurance code this may be addressed? 331: Concealment?

 

[I AM ALWAYS LIABLE]

I was involved in a car accident. The other driver has reported for years he lived in Roseville, CA to avoid the higher insurance rates in Sacramento,CA. Doesn't his act of concealing his correct Sacramento address void his contract with his insurance company?

Any idea where in the California insurance code this may be addressed? 331: Concealment?

My response:

Although you didn't mention it, I imagine that you've found out that the Defendant's insurance company is declaring a "reservation of rights" and will not be paying any claims on behalf of the Defendant-Insured until such time there is a declaration from a court that it should make payment.

There is no Statutory scheme, per se, in the Insurance Code of California for this situation. Rather, this is a contractual matter - - i.e., breach of contract based upon concealment of a material fact, or fraud "ab-initio".

As you know, insurance companies base their rates upon certain criteria; one of which is the address where the insured vehicle is garaged.

An insurance company can, and most state within their contracts, withhold coverage and that a policy becomes immediately void or voidable upon the discovery of a material falsehood in the application. Additionally, if an insured fails to inform an insurance company of a move from the contracted area of residence, likewise a cancellation upon discovery, and a decision of non-coverage may be made - - especially at the most inopportune time, like right after an accident.

Good luck.

IAAL

[Edited by I AM ALWAYS LIABLE on 04-30-2001 at 10:07 PM]

 

[RunningOnEmpty]

I handle auto claims for a major California insurance company. Generally, the address alone will not constitute a material fact which will void the policy. If the Insurance company would have still written the policy, only would have charged a higher premium, this won't result in the rescission or voidance of the policy. If the misrepresented fact would have caused the insurance company to decline to write the policy at all, then that's another story. The policy is voidable. (for instance if the applicant lies about their loss history and it is such that the insurance company would not have issued the policy had they known the correct information).

 

[I AM ALWAYS LIABLE]

My response:

Oh no ?

Well, I've got three plaintiff files where the defendants' insurance companies are doing just that ! The difference in garaged location is, on average between 10 to 20 miles, between Simi Valley and the San Fernando Valley.

Because the insurance companies did not receive the full measure of their premiums due to the lies of their insureds, because their cars were, in fact, garaged in the San Fernando Valley (where rates are higher than Simi Valley) they have all written "reservation of rights" letters to their insured's and copied me.

IAAL

 

[Juan Rodriguez]

In many states the insurance company can void the policy contract for a material misrepresentation if the additional premium is more than 20% of the original premium. Once the reservation of rights is mailed, the information is forwarded to the underwriting department to have the policy re-rated.