Insurance applications allow the insurance company to evaluate the potential risk associated with a proposed insured. For this reason, applications are often detailed and fact specific so that the insurance actuaries can appropriately weigh whether coverage should be granted and the amount of the premium(s).
When an insured provides false information on an insurance application, it is possible for the insurance company to avoid the insurance policy. To avoid an insurance policy based on a material misrepresentation, the insurance company must show: (1) that the insured’s representation is warranted to be true; (2) that the policy is conditioned upon its truth; (3) that the policy provides that the falsity of the application will avoid the policy; or (4) that the application is incorporated into and attached to the policy. Continental Cas. Co. v. Maxwell, 799 S.W.2d 882, 888 (Mo. Ct. App. 1990). Relatively speaking, this rarely occurs; however, in serious cases of non-disclosure or false information, insurance companies may try to avoid a policy, particularly if it is more economically feasible to contest.
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