When An Insured Makes Truthful Statements On The Application?

A representation is a statement made in an insurance application that the prospective insured represents as true to the best of his or her knowledge.

Are statements made by the applicant for insurance?

Statements made by an applicant on an insurance application are considered representations. The insured has an insurable interest in the applicant, but the insured is unaware of the application.

What is a statement that is guaranteed to be true and if untrue may breach an insurance contract?

What is a statement that is guaranteed to be truthful and, if not, could result in an insurance contract being breached? Warranty. In insurance, a warranty is a statement that is guaranteed to be correct. When a person applies for an insurance contract, the statements he or she makes are usually representations rather than warranties.

What type of information would be found in a policy’s insuring agreement?

An insuring agreement is a section of an insurance contract in which the insurance company specifies the risks it will cover in exchange for premium payments at a set amount and frequency. Exclusions for insurance coverage are often listed in the insuring agreement so that the policyholder is aware of the scope of their coverage. In the event of a disagreement over whether or not a certain loss is covered, insurance agreements are required. Both the insurance company and the policyholder should be able to evaluate if a loss is covered by the insurance agreement. Despite the fact that insuring agreements are intended to resolve these issues, arguments concerning the terms of the insuring agreement continue to arise. These situations frequently result in lawsuits in which each party asserts a different interpretation of the insurance contract.

Underwriting information identifying the insurer and insured, subject matter, premium (or how the premium will be computed), policy limits, policy duration, and a list of forms that make up the contract’s body is referred to as a declaration. The risks are specified in the declaration in some policies, but they are listed in the body of the contract in most policies, with the exception of the typical fire policy. The declaration is usually found on the contract’s opening page.

The first portion of an auto insurance policy’s Insuring Agreement is the declaration part, which contains information such as the insured’s name, vehicle make and model, policy start and end dates, insurance amount, and so on.

The Insuring Agreement specifies what the insurer agrees to cover under the contract’s provisions. It will refer to the insurance’s topic matter. The declaration and the insuring agreement will appear together on the first page of the contract in a normal fire policy. There is an insuring agreement for each subject matter in plans that have more than one subject matter, such as auto insurance coverage.

This is the portion of a vehicle insurance policy that comprises of an Insuring Agreement for automotive damage coverages. A typical auto insurance policy has two sections: “Liability Coverage” and “Car Damage Coverages.”

Exclusions – These policy clauses set the limits on the coverage promises made in the insuring agreements. These restrictions serve one or more functions, such as removing coverage for (1) losses caused by specific risks, (2) coverage provided by other insurance, and (3) coverage of uninsurable damages. Exclusions are the parts of an insurance contract that limit the scope of coverage and/or specify the causes and circumstances that aren’t covered. An example of a frequent exclusion in a vehicle insurance policy is as follows:

Conditions — Provisions in a policy that require the insured to do or not do anything, either before or after a loss has occurred. The insurer’s responsibility to pay for damages or provide services is dependent on the insured’s responsibility to undertake certain responsibilities or prevent certain events from occurring. Before a loss, one of the insured’s responsibilities is to have been truthful while seeking for insurance coverage. The coverage will be void if the insured conceals or commits fraud. After a loss, one of the insured’s responsibilities is to protect the property from additional damage. If this is not done, the insurer may be released from the responsibility to pay the claim.

The criteria listed above are an example of those included in a vehicle insurance policy’s Insuring Agreement. The insurer has specified the insured’s responsibilities in the event of an accident or loss.

Miscellaneous Provisions – Those clauses that, in addition to the declaration, insuring agreement, exclusions, and conditions, round out the insurance policy. These provisions aid in the establishment of working procedures for carrying out an insurance policy’s conditions. In the case of a vehicle insurance policy, an example of such provisions is as follows:

What is the correct insurance term for a statement that is guaranteed to be true?

(In insurance, a warranty is a statement that is guaranteed to be true.) The assertions made by an applicant while applying for an insurance contract are normally not warranties, but representations. Statements that are true to the best of the applicant’s knowledge are referred to as representations.)

What is the term for a statement that if it has been disclosed would have caused an insurer not to issue a policy?

If an insurer can prove either an intent to deceive or a serious deception, it meets the fundamental requirements of the Act. The terms “intent to deceive” and “material misrepresentation” should be read in the disjunctive sense, meaning that a material deception does not have to be done with the intent to deceive. Campbell v. Prudential Insurance Co., 15 Ill.2d 308, 155 N.E.2d 9 (1958); Roberts v. National Liberty Group of Companies, 159 Ill. App. 3d 706, 512 N.E.2d 792 (4th Dist. 1987); Logan v. Allstate Life Insurance Co., 19 Ill. App. 3d 656, 312 N.E.2d 416, 420; Roberts v. National Liberty Group (2d Dist. 1974).

The purpose of the insured to encourage his acceptance as an insurance risk by misleading assertions is defined by the courts as “intent to deceive.” In order to evaluate if there was fraudulent intent, courts will often look at a variety of circumstantial evidence. 159 Ill. App. 3d 706, 512 N.E.2d 792 (4th Dist. 1987); Fireman’s Fund Insurance Company v. Knutsen, 324 A.2d 223; Roberts v. National Liberty Group of Companies, 159 Ill. App. 3d 706, 512 N.E.2d 792 (4th Dist. 1987). (1974).

Similar fraudulent acts, if committed sufficiently close in time so that the same motive can be reasonably inferred to exist, are admissible to establish intent in Fireman’s Fund, on the sound logical principle that such similar acts reduce the possibility of an innocent mistake in an untrue and misleading statement.

In the context of insurance contracts, Illinois courts have defined “substantial misrepresentation” as a false fact that impacts the risk taken on by the insurer. As a result, the insured’s misrepresentation must be proven to have resulted in a significant increase in the risk insured against, and would have resulted in the application being rejected if the misrepresentations were known to the insurer. 148 Ill.Dec. 438, 560 N.E.2d 1035, American Country Ins. Co. v. Mahoney (Ill.App. 1 Dist. 1990).

According to the Mahoney court, an insurance applicant has an obligation to behave in good faith, and an insurer is entitled to truthful responses in order to establish whether the applicant fits its underwriting standards. However, under Illinois law, a good faith mistake does not excuse a significant misstatement on an insurance application or prevent an insurer from canceling a policy. 783 F.Supp 1141, Bageanis v. American Bankers Life Assur. Co. of Florida.

It’s worth noting that an insurer isn’t compelled to try to independently verify the information provided by the insured. National Tea Co. v. Allstate Insurance Company, 323 N.E.2d 521 (1 Dist 1975). In Bade v. Badger Mutual Ins. Co., 142 N.E.2d 218 (1966), for example, the court allowed the insurer to repudiate the policy despite the fact that the misrepresentations were revealed four years – and many renewals – later.

Materiality is a factual issue that must be decided by an objective criteria. As a result, regardless of the insured’s subjective belief, the insured must reveal any information requested on the application that, objectively examined, might give rise to a claim. However, materiality can also be established by the testimony of an insurer’s underwriter or employee regarding the importance of the requested information, or based on the underwriter’s experience or industry norms. It’s worth noting, though, that if the insurance doesn’t ask for the information in the application, it could be deemed irrelevant. Garde v. County Life Insurance Co., 147 Ill. App. 3d 1023, 498 N.E.2d 302, 308 (4th Dist. 1986); Ratcliffe v. International Surplus Lines Insurance Co., 194 Ill. App. 3d 18, 550 N.E.2d 1052, 1057 (1st Dist. 1990); International Insurance Co. v. Peabody International Corp., 747 F. Supp. 477, (1st Dist. 1978).

In Farmers Automobile, the Court construed against an insurer a declaration in an insurance policy that amounted to a warranty that “NO INSURER HAS REFUSED TO ISSUE,” because the language could have been misinterpreted, and the insured would have to search through definitions, exclusions, and conclusions many times more voluminous than the insuring agreement to interpret the declaration, according to the Court. Farmers Automobile may be reached at 737.

The lack of an insurance applicant to disclose information to an insurer has been found by courts to be a substantial misrepresentation. 36 Ill.Dec. 781, 401 N.E.2d 622; Stone v. Those Certain Underwriters at Lloyds, 36 Ill.Dec. 781, 401 N.E.2d 622; Stone v. Those Certain Underwriters at Lloyds, 36 Ill.De (Ill.App. 5 Dist 1980). As a result, representations made in an insurance application should not only be genuine, but also complete; that is, the insurer has a right to know the whole truth in order to conduct its own investigations and evaluate whether or not the risk should be assumed. Chavis v. Government Employees Insurance Co., 176 S.E.2d 131 (1970). For example, in Garde by Garde v. Country Life Insurance Co., 101 Ill.Dec. 120, 498 N.E.2d 302 (Ill.App. 4 Dist 1986), the court allowed an insurer to repudiate a policy based on the insured’s failure to disclose twenty-two other insurance policies that were already in effect.

The fact that an insurer performs an independent investigation does not relieve an insured of his or her responsibility to tell the truth. It also does not affect the insurer’s right to rely on the insured’s representations unless the investigation uncovered facts sufficient to reveal the untruth of the representation made, or the misrepresentation was of such a type that the insurer was required to conduct additional investigation. Meloni v. Allstate Insurance Co., 236 A.2d 402 (1967).

It’s worth noting that there’s an exception to the general rule about an insured’s obligation to disclose. In Boyles v. Freeman v. State Farm Mutual Automobile Insurance Company, 315 N.E.2d 899 (1st Dist 1974), the Court held that where a prospective insured admitted in good faith that his driver’s license had been suspended or revoked, but qualified his statement by saying that he couldn’t remember whether it happened in the previous five years, and where the insurer had the option of ignoring the qualification or refusing the risk, but chose to ignore the qualification, the insurer

If the insurer intended to rely on the assertions in the application, Illinois courts have generally supported the statutory requirement that the application be attached to the policy.

As previously stated, no misrepresentation…shall defeat or avoid the policy…unless such misrepresentation, false warranty, or condition shall have been stated in the policy or endorsement or rider attached thereto, or in the written application therefor, of which a copy is attached to or endorsed on the policy, and made a part thereof.. (emphasis added).

The law requiring the application to be linked to the insurance serves as a reminder to the insured that he or she is responsible for reviewing all statements made and correcting any inaccuracies. National Home Life Assurance Company v. Alperin, 336 N.E.2d 365 (1 Dist. 1975). When the agent fills out the application, however, the insured is given the benefit of the doubt because the agent may insert his own conclusions or answers that are incongruous with the facts. Boyles v. State Farm Mutual Automobile Insurance Company, 315 N.E.2d 899; Freeman v. State Farm Mutual Automobile Insurance Company, 315 N.E.2d 899; Boyles v. State Farm Mutual Automobile Insurance Company, 315 (1 Dist 1974).

In order to meet the statute’s requirements, courts typically require strict adherence to the statute, which means that misrepresentations must be reduced to writing and connected to the policy. 126 Ill.Dec. 808 International Amphitheater Co. v. Vanguard Underwriters Ins. Co. (1 Dist 1988). Furthermore, Illinois courts have held that an insurer cannot rescind a policy unless the application is physically attached to the policy, no matter how egregious a misrepresentation made in an application for insurance is, or how much a misrepresentation may have altered the nature of the insured risk. A. Epstein & Sons Int’l. Inc. v. Gibraltar Casualty Co., 206 Ill. App.3d 272, 562 N.E.2d 1039, 1042-43 (1st Dist. 1990).

The court in Gibraltar ruled that the insurer must either attach the written application to the policy or include unambiguous language in the policy that specifically integrates the application. A simple mention in the policy that the insured’s assertions were made part of the policy, or a broad reference to the application in the policy, according to the Court, does not satisfy the statute’s requirements. Gibraltar is ranked 239th in the world.

At least one Illinois court has recognized an exception to Section 766’s “attachment” requirement, namely, when the insured’s continuous duty to supplement and disclose facts that occur after the application is submitted but before the policy is issued. 60 Ill. App. 2d 170, 208 N.E. 2d 836, 839 Carroll v. Preferred Risk Insurance Co. (1965). In Carroll, the Court expressly stated that Section 766 was inapplicable in such instances, stating:

Who signs an insurance application?

The program is described as a “On the basis of information provided by the applicant, the agent and medical examiner (if applicable) fill out a form provided by the insurance company. It is signed by the applicant and, if issued, becomes part of the insurance policy. It provides data to the home office underwriting department, which uses it to determine whether or not an insurance policy will be issued, and if so, what classification and premium amount would be charged.”

The application is the primary source of information regarding insurability. Regardless of what other sources of information an underwriter may use, this will be the first to be examined and thoroughly analyzed.

The application gives the insurance firm vital information including the insured’s age, address, medical history, and other details. This information is necessary for the insurance provider to determine whether the applicant fulfills their underwriting guidelines and calculate the appropriate rate.

On the application, there are a series of questions that offer information for underwriting the policy. Name, address, age, height, weight, sex, occupation, wages, beneficiary, insurance history, and medical history are among the inquiries.

Previously, an agent might accept an application via mail or phone as long as the applicant signed it; however, this is no longer the case. During the application procedure, the buyer must be assisted by an agent in person. The reason for this is that the agent will be able to make observations that the underwriter will not be able to make. Visual observations can sometimes provide information not contained in the Agent’s Report. After the application has been completed, the agent is unable to make any modifications without the applicant’s signature.

What would happen if a life insurance application is given a conditional receipt from an insurance agent and then dies the next day?

What happens if a life insurance applicant receives a conditional receipt from an agent and then passes away the next day? If the application is approved, the claim will be paid. What does it take to make a change to an insurance application? The applicant’s initials are written on a piece of paper.

What is the correct insurance term for a statement that is guaranteed to be true quizlet?

Warranties are assertions that are guaranteed to be accurate and are part of a legal agreement. Insurers, not insureds, are bound by the warranty principle. An insurance contract can be canceled if there is a breach of warranty. The right answer is that insureds are bound by the warranty principle.