property claim gone wrong

[potsnpea]

What is the name of your state? What is the name of your state? California

I have had renters insurance policy and auto policy with an insurance company that only serves people who are directly related to an officer in the military. I was put on this insurance policy by a friend who is now long gone. He called me his brother and I his sister and told me that I could get insured by this company but in order to be insured by them I needed to say I was his sister and that his father was my father. After a short amount of time I separated my policy from his and I stayed with the same insurance company. Technically I did not qualify but for some dumb reason I am not sure of I decided to stay with the same company. I have been with them for 11 years. They are not much different from other companies but I was told they are very reputable and I had had a claim with them on a few occassions and I was comfortable with them. This last year my home was burglarized and vandalized twice. I am in the process of my second claim and my claim has been frozen and put under investigation. The claim is ligitimate nothing fraudulent in the claim itself except for the fact that I had told them I was a direct descendent of person of who I am not. I have paid for my policy month after month and have acted as regular policy holder.
I have not received any other information except for a call from the investigating insurance person who asked me questions in regards to this matter. I told him honestly that I was not actually related to this officer and the investigator recorded my statement and then told me he would have to talk to someone else. Now I am wondering what is going to happen. I am wondering if I have legally committed a crime. And if so, how serious. I am wondering if I will still be entitled to my claim and if so how long. And I am wondering what this will do in regards to past claims I have made. I also am curious after reading a lot of the posts on this website why it is that an insurance company can discriminate in this way. I read someplace that insurance companies have to be available to everyone regardless of sex, race, religion, or ancestry. Does having a clause that states you must be related to a military officer or married to a military officer count as ancestry?
Anyway there is a lot there. I will be very interested in any feedback.

 

[I AM ALWAYS LIABLE]

My response:

There was a prime, and distinct, reason why the claims adjuster asked you the questions concerning your relationship to the original policyholder. Material misstatements or omissions in an application for insurance are grounds for the insurer to rescind the policy, even after a claim arises. To prevent rescission, insureds often claim that they made full disclosure of all relevant facts to the person who prepared the application. The effect of such disclosures may depend on the status of the person who prepares the application:

-- Misstatements or omissions of information contained in an application prepared by an agent of the insurer may be chargeable to the insurer (in which case it cannot rescind the policy).

-- But if the application was prepared by an insurance broker (the agent of the insured), the application's contents are the insured's responsibility; i.e., the insurer is not charged with knowledge of other information allegedly disclosed to the broker. [Imperial Cas. & Indem. Co. v. Sogomonian (1988) 198 Cal.App.3d 169, 178, 243 Cal.Rptr. 639, 642-643]

Insurer's Right to Rescind for Material Misstatements in Application:
The insurance company's underwriting department relies upon the accuracy of the information disclosed in the insured's application in determining whether to underwrite a risk and what premium to charge. The insurer is therefore entitled to rescind the policy, even after a loss has occurred, for material misrepresentations in the application. The materiality of the information is determined solely by the probable and reasonable effect which truthful answers would have had upon the insurer. Rescission is proper even if no actual intent to deceive is shown. [Imperial Cas. & Indem. Co. v. Sogomonian (1988) 198 Cal.App.3d 169, 179, 243 Cal.Rptr. 639, 643; see Merced Co. Mutual Fire Ins. Co. v. State of Calif. (1991) 233 Cal.App.3d 765, 772, 284 Cal.Rptr. 680, 684; Freeman v. Allstate Life Ins. Co. (9th Cir. 2001) 253 F.3d 533, 536 (applying Calif. law)]

Where grounds for rescission exist and the insurer properly exercises its right to rescind, the insured's contract rights are extinguished ab initio (as if the policy had never existed): "If a representation is false in a material point . . . the injured party is entitled to rescind the contract from the time the representation becomes false." [Ca Ins § 359 (emphasis added)]

Impact on pending claims:
The insurer may thus avoid any liability for benefits provided under the policy, even on pending claims: "(A) rescission effectively renders the policy totally unenforceable from the outset, so that there never was any coverage, and therefore no benefits are payable." [Imperial Cas. & Indem. Co. v. Sogomonian (1988) 198 Cal.App.3d 169, 182, 243 Cal.Rptr. 639, 645 (emphasis added)]

Rescission is accomplished by:
• giving notice of rescission to the insured; and

• tendering repayment of all premiums received. [See Ca Civil § 1691]

Proceedings to enforce rescission:
After such rescission, the insurer may bring an action for declaratory or other relief to enforce the rescission. [See Ca Civil § 1691]

Suit may also be filed without prior notice of rescission or offer to restore benefits. In that event, service of the complaint in such action "shall be deemed to be such notice or offer or both." [Ca Civil § 1691 (emphasis added)]

IAAL

 

[potsnpea]

I am still a bit confused?

I am still a bit confused as to wether I have to worry about committing a crime and just how serious of one it is.

I am still a bit confused as to what it means to not discriminate based on ancestry and how and insurance company can for property claims and automobile insurance can have a requirement stating you have to be related to an officer in the military. Are they a better a risk?

Are you saying that basically I am looking at not receiving my claim?

And what do you think will happen in regards to the claims I have made in the past since I've been with them for 11 years and have had several claims with them over the years?

Also I rent a home from my mother and I believe she carries homeowners insurance. Would that cover my belongings? And could I make a claim there if my renters insurance did not come through?

Is it illegal or freud to make two claims from two different insurance companies for the same incident as in property claims or auto insurance?

 

[I AM ALWAYS LIABLE]

Re: I am still a bit confused?

I am still a bit confused as to wether I have to worry about committing a crime and just how serious of one it is.

I am still a bit confused as to what it means to not discriminate based on ancestry and how and insurance company can for property claims and automobile insurance can have a requirement stating you have to be related to an officer in the military. Are they a better a risk?

Are you saying that basically I am looking at not receiving my claim?

And what do you think will happen in regards to the claims I have made in the past since I've been with them for 11 years and have had several claims with them over the years?

Also I rent a home from my mother and I believe she carries homeowners insurance. Would that cover my belongings? And could I make a claim there if my renters insurance did not come through?

Is it illegal or freud to make two claims from two different insurance companies for the same incident as in property claims or auto insurance?

=========================================

I am still a bit confused as to wether I have to worry about committing a crime and just how serious of one it is.

MY RESPONSE: First, I want you to take a good, deep, breath. Breathe in, breathe out. You're not going to jail for having lied on an insurance application. Okay? See below for what may very well happen.



I am still a bit confused as to what it means to not discriminate based on ancestry and how and insurance company can for property claims and automobile insurance can have a requirement stating you have to be related to an officer in the military. Are they a better a risk?

MY RESPONSE: There is no discrimination. An insurance company has every right to place in their policies that an insured MUST meet certain criteria to be an insured; e.g., to be related to someone in the military. It has nothing to do with being a "better risk". It has everything to do with why the insurance company is in existence in the first place. An insurance company can exist for Left-Handed people if that's who they want to insure. It has nothing to do with legally cognizable "discrimination."



Are you saying that basically I am looking at not receiving my claim?

MY RESPONSE: Yes, that's exactly what I'm saying. You'll undoubtedly be "cancelled", and your premiums returned to you.




And what do you think will happen in regards to the claims I have made in the past since I've been with them for 11 years and have had several claims with them over the years?

MY RESPONSE: Ah, now you've "hit" on a real issue. The insurance company has a duty to research their insureds to make sure their insureds meet the minimum policy criteria. It's the same duty that you have - - to read your policy entirely, and to understand it, thereby not expecting any more or any less from your policy. In other words, you are imbued by law to know and understand each clause in the policy, and to say, "I didn't know" will not "fly." Well the same thing goes for the insurance company. They cannot retroactively do anything to you with regard to past claims because they had a duty to investigate you prior to making payments to you on the other claims. Their opportunity and duty was always there. But now, in your current circumstances, the issue has finally "reared its ugly head" and the insurance company will undoubtedly cancel the contract, not pay your claim, and return your current period premiums to you.



Also I rent a home from my mother and I believe she carries homeowners insurance. Would that cover my belongings? And could I make a claim there if my renters insurance did not come through?

MY RESPONSE: Check with the agent of that insurance company. I would think that it would, but you should check anyway.



Is it illegal or freud to make two claims from two different insurance companies for the same incident as in property claims or auto insurance?

MY RESPONSE: Double-dipping. If there are two, independently paid insurance policies, and depending on whether or not one of those policies has a "Primary Insurance" clause, then double-dipping should be just fine. Again, check with the insurance agent on this issue to determine whether there's a "Primary" insurance clause that would make one insurance company responsible when two policies exist on the same property.


Good luck to you.

IAAL

 

[potsnpea]

more questions

Proceedings to enforce rescission:
After such rescission, the insurer may bring an action for declaratory or other relief to enforce the rescission. [See Ca Civil § 1691]

What does it mean for the insureer to bring an action for declaratory or other relief to enforce the recission?

and

How far back will they have to payback my premiums if they do not have to settle this claim?