Introduction
When it comes to insurance, the general public does not always understand the importance of an insurance application when looking at getting an insurance policy. The insurance application is the start of the process for obtaining an insurance policy. The insurance policy is a contract between an insurer, the insurance company, and the insured, the person looking to receive the insurance, that obligates both parties of the contract to use utmost good faith. If one of the parties fails to use utmost good faith, there is a breach of contract.
A breach of contract can be caused by a material misrepresentation on the application for insurance. In an insurance policy there are provisions that can void coverage if the insured hides or …show more content…
Pace. One of the key elements in this case is the misrepresentation made by Mr. Pace. The facts of the case are Julia Keys, the plaintiff, owned a 1951 Ford. On December 3, 1956 her vehicle was struck by another vehicle which was owned by defendant Robert H. Pace. In this accident, Ms. Keys suffered damage to her vehicle and also significant personal injuries. On May 24, 1957 she filed a third-party lawsuit against Mr. Pace due to her allegations of negligence on his part in the collision.
The piece of the case that is relevant to the facts here, is that it was found Mr. Pace made a false statement on his application for insurance to Detroit Automobile Inter-Insurance Exchange. On the application Mr. Pace answered question 3: ‘Has your operator’s license been revoked, suspended or refused within the past 3 years?’ as no. A premium was charged by the insurance company based on the information provided by Mr. Pace. However, the insurance company later notified Mr. Pace that the policy was void from the date of its inception due to the misrepresentation that was made on the application for …show more content…
Pace had been found guilty of operating a motor vehicle 50 miles per hour in a 30 mile an hour zone. At that time, he was placed on a 2-year probation. He was also required to surrender his driver’s license. On November 27, 1956 Mr. Pace received his license back. The same day he applied for auto insurance from Detroit Automobile Inter-Insurance Exchange.
In this case the supreme court cited
Our decision in Keys v. Pace, 358 Mich 74, 82; 99 NW2d 547 (1959), made clear that a fact or representation in an application is ‘material’ where communication of it would have had the effect of ‘substantially increasing the chances of loss insured against so as to bring about a rejection of the risk or the charging of an increased premium” (Reference). The supreme court stated that if the insurer had received the correct information it would have lead the insurer to charge more of a premium, which would have been a different contract. The court ordered summary disposition in favor of the insurer.
Manier, et al. v. MIC Gen. Ins.
When it comes to insurance, the general public does not always understand the importance of an insurance application when looking at getting an insurance policy. The insurance application is the start of the process for obtaining an insurance policy. The insurance policy is a contract between an insurer, the insurance company, and the insured, the person looking to receive the insurance, that obligates both parties of the contract to use utmost good faith. If one of the parties fails to use utmost good faith, there is a breach of contract.
A breach of contract can be caused by a material misrepresentation on the application for insurance. In an insurance policy there are provisions that can void coverage if the insured hides or …show more content…
Pace. One of the key elements in this case is the misrepresentation made by Mr. Pace. The facts of the case are Julia Keys, the plaintiff, owned a 1951 Ford. On December 3, 1956 her vehicle was struck by another vehicle which was owned by defendant Robert H. Pace. In this accident, Ms. Keys suffered damage to her vehicle and also significant personal injuries. On May 24, 1957 she filed a third-party lawsuit against Mr. Pace due to her allegations of negligence on his part in the collision.
The piece of the case that is relevant to the facts here, is that it was found Mr. Pace made a false statement on his application for insurance to Detroit Automobile Inter-Insurance Exchange. On the application Mr. Pace answered question 3: ‘Has your operator’s license been revoked, suspended or refused within the past 3 years?’ as no. A premium was charged by the insurance company based on the information provided by Mr. Pace. However, the insurance company later notified Mr. Pace that the policy was void from the date of its inception due to the misrepresentation that was made on the application for …show more content…
Pace had been found guilty of operating a motor vehicle 50 miles per hour in a 30 mile an hour zone. At that time, he was placed on a 2-year probation. He was also required to surrender his driver’s license. On November 27, 1956 Mr. Pace received his license back. The same day he applied for auto insurance from Detroit Automobile Inter-Insurance Exchange.
In this case the supreme court cited
Our decision in Keys v. Pace, 358 Mich 74, 82; 99 NW2d 547 (1959), made clear that a fact or representation in an application is ‘material’ where communication of it would have had the effect of ‘substantially increasing the chances of loss insured against so as to bring about a rejection of the risk or the charging of an increased premium” (Reference). The supreme court stated that if the insurer had received the correct information it would have lead the insurer to charge more of a premium, which would have been a different contract. The court ordered summary disposition in favor of the insurer.
Manier, et al. v. MIC Gen. Ins.