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When Insurance Companies Deny Claims Based on Misrepresentation

Texas Insurance Policy Cancellation Attorney

Insurance companies are constantly seeking ways to make even larger profits. One way is by denying claims by alleging the insured made misrepresentations to obtain the insurance policy. These allegations, of course, are made coincidentally only after a claim is made. This practice is often described as "post loss underwriting" and is a growing practice used by many insurance companies. For example, after receiving a claim, a life insurance company will argue that the insured failed to disclose a medical condition when the policy was applied for and the insurer claims it would have not written the policy had the insurer known. Inevitably, the insurer will have to admit it conducted no analysis or investigation to determine insurability (underwriting) before it issued the life insurance policy.

Although Texas insurance law protects consumers, an insurance company will rarely reverse itself after denying a claim or avoiding payment because of a so-called misrepresentation. As the old adage goes, "that’s our story and we’re sticking to it." If you have had your insurance cancelled or a claim denied because the insurer alleges misrepresentation, our law firm can assist with opposing this meritless excuse often relied on by an insurance company. At the Law Office of Mark A. Ticer we have been helping clients with insurance claims since 1990.

A Misrepresentation Must Be Based on An Intent to Deceive

Based on Texas law, a misrepresentation by itself is not a sufficient legal basis to deny a claim or cancel an existing policy. The alleged misrepresentation must be material and based on an intent to deceive. In many instances, the alleged misrepresentation is no misrepresentation at all but merely an oversight, a mistake, or immaterial and your claim should be paid and/or your policy reinstated. Unfortunately, most consumers do not know this and may simply give up and accept an insurer’s excuse of misrepresentation, denial, or cancellation.

A Misrepresentation Must Be Material

Mark A. Ticer is knowledgeable and experienced about methods and practices insurance companies use to deny claims or cancel policies when allegations of misrepresentation are made. We have helped many clients obtain the insurance benefits they are entitled to by disproving an insurer’s allegation of misrepresentation. By way of example, we have successfully demonstrated in numerous instances that there is no material misrepresentation, any so-called misrepresentation was not material, there was no intent to deceive the insurer, or at the very worst any misrepresentation was an honest mistake or an oversight.

Insurance Companies Use the Misrepresentation Excuse After a Claim is Made

Insurance companies that deny claims or cancel policies based on claims of misrepresentation are almost always guilty of failing to investigate or underwrite the insurance policy before it is written or issued – determining insurability. An insurer’s poor underwriting practices should not be a basis to avoid payment of a covered claim. Insurers happily take your premiums until you make a claim. Only after a claim is made does the insurer decide to do some investigation – "underwriting" for the first time for the policy. This practice is termed as "post loss underwriting" and has become a prevalent method to deny claims. This approach may constitute bad faith, although for some insurers are willing to risk it if they can deny enough claims where an insured does not challenge the insurer’s decision. Post loss underwriting is an extremely lucrative strategy for the insurance companies who seek to scare off claims.

Contact our Dallas law firm to discuss your case free of charge. We respond to charges of insurance misrepresentation throughout the State of Texas.