Title 5 Representation
Title 5 Representation
REPRESENTATION
MATERIALITY OF REPRESENTATION
- It is not left to the insurance company to say after the loss has
occurred that it would or would not have issued the policy had an
answer been truly given. The matter misrepresented must be of the
character which the court can say would reasonably affect the
insurer’s judgment.
CONCEALMENT MISREPRESENTATION
APPLICABILITY OF SECTIONS 26 to 48
1.) In general
- A contrat of insurance may be rescinded on the ground of concealment,
or false representation, or breach of warranty. This action is founded
upon and presupposes the existence of the contract, which is rescinded.
2.) In non-life policy
- The insurer is no longer entitled to rescind a contract of insurance after
the insures has filed an action to collect the amount of the insurance.
- Where any of the material representations is false, the insurer’s tender of
the premiums and notice that the policy is cancelled before
commencement of the suit thereon, operates to rescind a contract of
insurance.
3.) In life policy
- The defenses mentioned are available only during the first 2 years of a
life insurance.
Incontestability – after the requisites are shown to exist, the insurer is estopped
from contesting the policy or setting up any defense, except as is allowed, on the
ground of public policy.
The insurer may still contest the policy on any of the following grounds:
1.) That the person taking the insurance lacked insurable interest
2.) That the cause of death of the insured is an excepted risk.
3.) That the premiums have not been paid
4.) That the conditions of the policy have been violated
5.) That the fraud is of a particularly vicious type
6.) That the beneficiary failed to furnish proof of death or to comply with any
condition
7.) That the action was not brought within the specified time.