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Application Misrepresentation/Fraud

Application Misrepresentation/Fraud

When researching insurance options the most tedious part of the process is filling out application after application after application. Every company seems to have their own form to complete, and no other application will do. Insurance companies require applications to find out all they can about your business operations. They want to know what they are potentially going to cover so that they can rate your risk properly and charge the appropriate amount of premium. They may also choose to decline a business applicant if the type of business is not something they are interested in insuring. Have You Reviewed Your Application? Depending on the size of the application you may have several pages to fill out, and then there is the signature line that comes at the bottom of the last page. It is usually proceeded by a bunch of legal jargon that most people don’t read prior to signing – but they should. This is what it looks like on the Acord 125 Commercial Insurance Application: That’s a lot to read, but it is definitely worth taking a moment to read and discuss with your broker prior to signing. What Constitutes Material Misrepresentation or Fraud? Material misrepresentation or fraud is defined as a misstatement in answer to a question on an application. That question is so important that if it had been answered truthfully, the insurance carrier may have declined coverage or charged a higher premium for the insurance policy issued.  It can be any of a number of things including: Misrepresenting prior loss history to a new insurance carrier.Failing to disclose criminal convictions or bankruptcies.Misrepresenting the...