A recent case in New York dealt with the issue regarding a misrepresentation made in respect of the “residency” requirement in a homeowners policy.  Generally,  a misrepresentation is material if the insurer would not have issued the same policy had it known the facts misrepresented.

In Morales v. Castlepoint, a homeowner sought to recover under his homeowners insurance policy for damage sustained in a fire.  The insurer learned during the claim investigation that the insured was not living at the insured premises as claimed in the  policy application and disclaimed coverage due to the material representation.

It was undisputed that the plaintiff never lived at the premises, despite the fact that the application submitted to the insurer indicated that the premises were occupied by the plaintiff and served as his “primary residence.”   The insured tried to blame his broker, claiming that the application was submitted without his authority and therefore the misrepresentation was not attributable to him.

The trial court denied the insurer’s motion for summary judgment.  However, on appeal, the  Appellate Division found that the insurer demonstrated that the insurance application contained a material misrepresentation regarding whether the premises would be owner-occupied and that the misrepresentation was material, and that the insured ratified the representations by accepting the policy for owner-occupied premises and permitting it to be renewed for years on the same terms.

Thanks to Jorgelina Foglietta for her contribution to this post and please write to Mike Bono for more information.