Getting a letter with “material misrepresentation” on it – whether from the insurance company, attorney or someone else means that a difficult conversation needs to be had.
Within the confides of an insurance contract, material misrepresentation occurs when the insured makes an untrue statement that is material to the acceptance of risk and would have changed the rate at which insurance would have been provided or would have changed the insurance company’s decision to issue the contract.
In the contract with the insurance carrier, they have written out if the insured does not tell the full truth on their application they have the right and authority to cancel the policy and return the premium to you, retroactively.
How can you avoid Material Misrepresentation?
Material Misrepresentation is easily avoidable.
Being upfront, open honest and truthful with your agent about your operations such as:
- How you operate your personal vehicles – who drives them?
- Who lives in your home?
- Do you have a trampoline? Swing set?
- Do you have a dog? If you do, what kind?
- What kind of business are you operating?
- Are your sales correct?
Being upfront, open honest and truthful with your agent and on your applications is going to lead to success whether you like the premium or not. Following the premium, we can look at other avenues in regards to adjusting it or trying to.
- What can we do/ how do we get the premium down?
- Are we going to reduce coverage?
- Are we going to increase deductibles?
- Are we going to create a loss control and safety program for your business that’s going to keep you from putting in claims?
In conclusion, do not try and cheat the system by not telling the truth on your insurance application. We can reassess and look at ways to lower your premium, or adjust your policy – instead of you risking the termination of your policy because the information is not correct. If you think any of the information in regards to a currently policy is inaccurate or you want an overview look of your policies to ensure everything is correct, contact us today!
