The First Department, reversing Supreme Court, determined a question in the application for insurance coverage was ambiguous. Therefore the answer to the question was not a material misrepresentation and the policy remains in full force and effect:
A misrepresentation in an insurance application is material, voiding the policy ab initio, if, had the true facts been known, either the insurer would not have issued the policy or would have charged a higher premium … . Even an innocent misrepresentation is sufficient to void the policy … . However, “an answer to an ambiguous question on an insurance application cannot be the basis for a claim of misrepresentation” in procuring insurance … .
Here, on defendants-respondents’ insurance application submitted to plaintiff, Question 9, which asked “Any uncorrected code violations?” is ambiguous. While the plain language asks whether there are “any uncorrected fire code violations” and not uncorrected fire code notices of violation, different witnesses provided five different understandings as to what the question was asking. In any event, this Court has used the term “violation” to mean the issuance of a citation … . Indeed, the question is not even posed as a complete sentence but a sentence fragment lacking a verb, which could have clarified the question. Starr Indem. & Liab. Co. v Monte Carlo, LLC, 2021 NY Slip Op 00044, First Dept 1-5-21