An auto insurer may deny PIP coverage if the applicant didn’t tell the insurer about all the people who resided with the applicant when the Florida insurance application was completed.
This assumes that the PIP insurance application asked the applicant to list all residents and he or she didn’t. PIP is an acronym for Personal Injury Protection insurance.
This article focuses on Florida cases. Each state has different laws.
Let’s look at an actual Florida car accident case where the auto insurer denied PIP benefits because the applicant didn’t list a person over who he resided with when he completed the application.
United Auto Insurance Company denies PIP because insured didn’t list a resident on application
United Automobile Insurance Company (“United”) issued a no-fault motor vehicle policy to Salgado. It was to be in effect from December 18, 2003, until December 18, 2004.
United asked Salgado to list all residents who are 14 years or older
The insurance application contained two separate provisions that relate to a misrepresentation of material fact. In the section entitled “Driver and Resident Information,” the application stated:
All persons 14 years or older, licensed or not, who reside with the applicant(s) must be listed below whether or not they are operators of the vehicles listed. Failure to provide this information shall constitute a material misrepresentation, which shall result in all insurance coverages being void.
Tip: Sometimes clients tell me that they didn’t have to list they child (14 years or older) because they don’t have a driver’s license or aren’t old enough to drive. Others think that they do not have to list a roommate on the application.
Both of these arguments will fail!
Additionally, above the applicant’s signature, the application provided:
The undersigned by signature hereto, represents the statements and answers made herein to be true, complete and correct and agrees that any policy may be issued or renewed in reliance upon the truth, completeness and correctness of such statements and answers and understands that falsity, incompleteness, or incorrectness may jeopardize the coverage under such policy so issued or renewed Fla. St. 627-409. It is also hereby agreed and understood that misrepresentation of a material fact on this application may cause this coverage to be declared null and void as of the effective date Fla. St. 627-409.
Salgado was hurt in a car accident
After receiving treatment, Salgado submitted his medical expenses to United for reimbursement. After conducting an investigation, United determined that Salgado had failed to list his brother as a member of his household on his insurance application, and notified Salgado that, as a result of this material misrepresentation, his policy was cancelled as of its effective date.
Fact: I had a case where United required my client to have her statement taken under oath at their office. This is inconvenient to the people who are seeking PIP benefits. It not a pleasant experience.
Salgado sued United Auto in an attempt to get them to cover him for PIP. He sued even though he made a misrepresentation in his insurance application.
United’s underwriting supervisor and PIP lawsuit adjuster said that Salgado’s failure to list his brother as a member of his household on his insurance application constituted a material misrepresentation as the unknown risk would have resulted in a higher premium.
Basically, United said that if Salgado would have listed his brother in law on the PIP application, the premium (insurance rate) would have been higher.
Tip: If the material misrepresentation would not have resulted in a higher premium, United would have had to give him PIP benefits.
Salgado lost the case. United didn’t have to give him PIP benefits.
The case that I talked about is United Auto. Ins. Co. v. Salgado, 22 So.3d 594, 601 (Fla. 3d DCA 2009). The appeals court issued its ruling on august 5, 2009. This court handles personal injury appeals for Miami-Dade and Monroe County, Florida.
I assume that this accident happened in one of these counties. In Florida, most lawsuits take place in the county where the accident happened.
Florida law says certain misrepresentations and concealments can prevent recovery
Section 627.409, Florida Statutes, says that misrepresentations, omissions, concealment of facts and incorrect statements prevent recovery under a policy if they are:
(1) fraudulent;
(2) material to the risk assumed by the insurer; or
(3) the insurer in good faith would not have issued the policy or would have done so only on different terms if the insurer had known the true facts
What can a PIP insurer do if the applicant failed to disclose a resident and he is later hurt in an accident?
The insured can rescind the policy, from the day that it became effective. This means that the claimant gets no PIP benefits.
Are certain Florida auto insurers more likely to deny PIP coverage for failing to list residents of the household in the application?
Yes. Florida nonstandard auto insurers are more likely to deny coverage due to failing to list a resident in the application.
The insurers who are more likely to deny coverage in this case are:
- United Auto Insurance Company
- Windhaven Insurance
- Infinity Insurance Company
- Imperial Fire and Casualty (RAC)
Companies that sell Florida car and truck insurance policies are more likely to let the misrepresentation slide are:
- State Farm
- GEICO
- Progressive
- Allstate
- United States Automobile Association (USAA)
- Travelers Insurance Company
- Safeco Insurance Company
- Liberty Mutual
- 21st Century Centennial Insurance Company (part of the Farmers Insurance Group of Companies)
- Esurance
- Nationwide Insurance Company
Bottom Line:
When applying for auto insurance, answer every question on the application as honest as possible.
If the auto insurer asks you to list every person who you live with that is 14 or older, do it. Do this even if you reside with someone who is too young to drive, doesn’t have a driver’s license, or will never drive your car.
If you don’t do this, don’t be surprised when the PIP insurer denies coverage and you owe $10,000 in out of pocket medical bills. If the PIP insurer denies you benefits because of your material misrepresentation, you are considered to be “uninsured”.
In certain counties in Florida, you won’t be able to sue the tortfeasor for these out of pocket medical bills if you were “uninsured”. In addition, in certain counties the tortfeasor will get a PIP credit if the claimant is uninsured under Florida’s No Fault Law.
This means that you may be stuck with up to $10,000 in medical bills and lost wages because of not listing every person who you reside with.
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