SEPTEMBER 2007 BAD FAITH CASES INSURER NOT LIABLE IN BAD FAITH WHEN INSURED MADE MATERIAL MISPRESENTATIONS (Philadelphia Federal)
The Court found that there was clear and convincing evidence that the insured committed insurance fraud. The insured applied for a Deluxe Plus homeowner’s policy with the insurer. After the insurer’s underwriting department examined the application and found misrepresentations, the insurer advised that the policy would be cancelled within 60 days of the date of issuance. Two days before the homeowners insurance policy was to be cancelled, the residence was damaged by a fire.
The Court determined that in its application, the insured had knowingly and with the intent to defraud, misrepresented the age of the premises, the date of purchase, that the residence would be occupied within 30 days, and that the residence had prior insurance. The Court found that these misrepresentations were material because the insurer would not have otherwise issued the homeowner’s policy. Accordingly, the Court ruled that the insured had committed insurance fraud.
Date of Decision: August 7, 2007
Wezorek v. Allstate Ins. Co., United States District Court for the Eastern District of Pennsylvania, No. 06-1031, 2007 U.S. Dist. LEXIS 57321 (E.D. Pa. August 7, 2007)(Rice, M. J.)
