The Second Department determined the trial court property granted the insurer’s motion for a judgment as a matter of law. The insured acknowledged that the property was configured as a three-family home, but that he indicated it was a two-family home on the application for insurance. Even an innocent material misrepresentation renders the policy unenforceable:
In order to establish the right to rescind an insurance policy, an insurer must show that its insured made a material misrepresentation of fact when he or she secured the policy … . A misrepresentation is material if the insurer would not have issued the policy had it known the facts misrepresented … .
Here, the plaintiff’s own testimony established that his house was structurally configured as a three-family dwelling, and thus, the statement on his insurance application indicating that it was a two-family dwelling was a misrepresentation … . Although the plaintiff testified that he believed his house was a legal two-family dwelling, an insurer may rescind a policy if the insured made a material misrepresentation of fact even if the misrepresentation was innocently or unintentionally made … . Further, the defendant established that the plaintiff’s misrepresentation was material through the uncontroverted testimony of its witnesses and documentary evidence, including its underwriting guidelines, which established that the defendant did not insure three-family dwellings, and would not have issued the subject policy if the plaintiff and his wife had disclosed that the house contained three dwelling units … . Estate of Gen Yee Chu v Otsego Mut. Fire Ins. Co., 2017 NY Slip Op 01536, 2nd Dept 3-1-17
INSURANCE LAW (EVEN AN INNOCENT MATERIAL MISTAKE ON AN INSURANCE APPLICATION RENDERS THE POLICY UNENFORCEABLE)/MISREPRESENTATION (INSURANCE LAW, EVEN AN INNOCENT MATERIAL MISTAKE ON AN INSURANCE APPLICATION RENDERS THE POLICY UNENFORCEABLE)