Philadelphia’s Commerce Court upheld as valid an insurance policy in the face of the carrier’s claims of misrepresentation in obtaining the policy. Though the insured had moved from Pennsylvania to New York, resulting in some address discrepancies, the court heavily weighed the fact that the insurer never sent a formal notice of cancellation of the policy.
The court noted that in order for an insurer to prove misrepresentation to void a policy, it must establish: (1) that the representation was false; (2) that the subject matter was material to the risk; and (3) that the applicant knew it to be false and made the representation in bad faith. Defendant’s address and driver license mistakes were inadvertent and not on the level of deliberate deception required to find bad faith on the part of defendant.
Because the insurer failed to establish that the policyholder knew his representation to be false, thus making the representations in bad faith, he carrier failed to meet its burden of proving that the insured had the requisite “deliberate intent to deceive.”
Date of Decision: February 1, 2006
Rutgers Cas. Ins. Co. v. Richardson, Court of Common Pleas of Philadelphia, June Term 2004, No. 486, 2006 Phila. Ct. Com. Pl. LEXIS 70 (C.C.P. Philadelphia Feb. 1, 2006) (Abramson, J.)