A class action was filed last summer against an insurer that denied claims for a loss after voiding the policy because of misrepresentations by the insured. Green v. Nationwide General Ins. Co., Case no. 2018 cv 01284 (Cuyahoga Cty. C.P. Ct.). In Green, the insured was in an auto accident, but failed to disclose that her son, and not the insured, was the title owner of the insured vehicle. After submitting a claim, the insured received notice that the insurer was rescinding the policy because of this misrepresentation on her application and denied coverage for the loss.
The insured alleges a difference under Ohio law between warranties and representations, the former of which renders the policy void ab initio, while only the latter makes the policy voidable, and then only if the misstatement was fraudulent and material. This theory has its genesis in some Ohio appellate decisions that cite to an Ohio Supreme Court for this distinction, but that may not necessarily contain that holding. The insured in Green seeks to represent a class of Ohio insureds whose claims were denied because their policies had been rescinded for misrepresentations in the applications.
The legal issue is of a type that may over time percolate upward for a definitive ruling, but that will take time. Meanwhile, the plaintiffs' bar has been looking for other insureds to file other class actions against insurers based on the same claims, so expect more of these.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
