My Red Bank colleague, Dan Ballard, and I recently gave a presentation on inaccuracies and mistakes at the 2020 Professional Public Adjusters Association of New Jersey (PPAANJ) conference. During the presentation, I discussed case law in New York provided that a home insurance policy can be annulled if the insured intentionally and fraudulently places evidence of the loss of a lost property that the insured did not have, or adds a false and fraudulent value to the items not insured. owned.
Unsurprisingly, insurers have tried to use that case law and claim that it is fraud or a material misstatement whenever an insured provides incorrect information as evidence of loss. For example, after a fire destroyed or damaged virtually everything in the insured's home, the insurer sought to invalidate the policy based on its conclusion that the insured had misrepresented material facts about the value of their personal property and engaged in fraudulent conduct regarding part of the insured's property. receivables. More specifically, the insurer pointed to a small number of the thousands of damaged items on the insurance's evidence of loss that reflects incorrect information.
The court rejected the insurer's erroneous defense and noted that the provision of incorrect information does not necessarily equate to fraud. 1
Another department in the New York Appellate Division recently came to a similar conclusion. In that case 2 an insured home suffered extensive damage as a result of a water leak in the master bathroom on the second floor. The insured submitted a proof of loss that included a description of the damage to the home and a contractor's estimate of the cost of repairing the home in the amount of $ 72,748. The insurer refused to cover the insured's claim because the claim was inflated and there were previous damages that were not disclosed. The court found that although there was a difference between the insurer's and the insured's contractors' estimate of the damages and the loss, the insurance's proof of loss did not include duplicate, unpaid costs or significant sums of money
1 Magic v. Preferred Mut. Ins. Co ., 91 A.D.3d 1232 (2012).
2 Magnano v. Allegany Co-Op Ins. Co. 187 AD 333 (2020).