Case Update: January 2002
INSURANCE/APPLICATION/MISREPRESENTATION
The Appellate Division has issued a published decision with potentially far-reaching implications for the insurance industry. Palisades Safety&Insurance Assn. v. Bastien, an automobile insurance coverage action, involved the applicant’s failure to name his wife as a household resident or additional driver of his car. Following an accident in which the wife was injured the carrier denied her claim for PIP benefits due to Mr. Bastien’s material misrepresentation on the application.
A Palisades underwriter certified that disclosure of the wife as a household resident or additional driver would have affected the premium charged. Citing Massachusetts Mutual Life v. Manzo, the Appellate Division affirmed judgment in favor of the carrier. The Court held that the named insured’s application omission qualified as “prospectively reasonably relevant,” thereby entitling the carrier to disclaim coverage. [MORE]