What If You Make A Misrepresentation?

An experienced insurance law attorney will tell that insurance misrepresentations made by the insured do not always mean “no coverage.”
A 1956, Texas Supreme Court case is a good illustration of the above. The style of the case is, Womack v. Allstate. Here is the relevant information.
This is a summary judgment case. On January 4, 1952, Allstate issued a policy of public liability automobile insurance to Mrs. L. N. Coffee, the wife of William T. Coffee. Malcolm Womack and others, recovered judgment in the 99th District Court of Lubbock County against William T. Coffee for the damages which they sustained on July 20, 1952, when the automobiles in which they were riding collided with a vehicle operated by the latter. Womack instituted this suit to recover the amount of the judgment from Allstate, alleging that at the time of the accident William T. Coffee was driving, with the consent of the insured, the automobile covered by Allstate’s policy. The trial court entered summary judgment for Allstate, and the Court of Civil Appeals affirmed. This court reversed the summary judgment.
In support of the summary judgment in its favor, Allstate contended that a material misrepresentation of fact, made a part of the policy, invalidated the policy at the option of Allstate.
This Court pointed out that the application for insurance signed by Mrs. Coffee states that the applicant has not had a driver’s license suspended, revoked or refused during the last two years, and the policy contains a declaration to the same effect. Allstate alleged that these representations were untrue because the automobile driver’s license of the insured had been suspended during the period of two years immediately prior to the issuance of the policy, and that such representations were material to the risk and were intentionally made for the purpose of misleading Allstate. To establish the truth of these allegations, Allstate filed affidavits of the custodian of the records of the Drivers License Division of the Texas Department of Public Safety certifying that the driver’s license of Laura Thompson Coffee was suspended on July 23, 1951, and an affidavit by one of Allstate’s representatives that Mrs. L. N. Coffee and Laura Thompson Coffee are one and the same person. This Court, for purposes of argument, assumed that the affidavits establish that the driver’s license of the insured was suspended as alleged.
Under the provisions of art. 21.17 of the Insurance Code, (now 705.005) misrepresentations made in the application for or in obtaining an insurance contract do not constitute a defense unless the insurer establishes that within a reasonable time after discovering the falsity of the representations, it gave notice that it refused to be bound by the contract. The statute also provides that ninety days shall be a reasonable time. Allstate alleged that within a reasonable time after learning the true facts notice was given to the insured that the company refused to be bound by the contract, and established by affidavit that on October 16, 1952, a letter was written to the assured denying liability under the policy and declaring the same void from its inception because of the alleged misrepresentation. The record does not show, however, when Allstate discovered the falsity of the representation, and it cannot be said that the notice was given within a reasonable time thereafter as required by the statute. Since one of the essential elements of Allstate’s defense based on misrepresentation was not established, summary judgment could not properly by predicated on that defense.
There are sometimes good ways to defeat an insurance company. That is why an experienced Insurance Law Attorney must be consulted.