What is New York Law for Material Misrepresentations?

The law governing New York life insurance material misrepresentations is New York Insurance Law § 3105.

To begin, a surprising and unfair aspect about New York life insurance law to many consumers is that a material misrepresentation need not relate to the cause of death. Rather, a material misrepresentation can be shown if the omission or misrepresentation would have caused the insurance company to either (1) decline to issue a policy; or (2) issue a policy at a higher premium rate. Courts find the cause of death, and whether it relates to the misrepresentation, to be irrelevant.

Here is a simple example: assume that an insured dies in a car accident. If a misrepresentation was made by failing to disclose that the insured had cancer, this would probably be a valid reason to deny coverage, even though it had no relationship to the cause of death.

What does “material” mean?

But the omission or misrepresentation must be “material” for there to be rescission of coverage. So, if the insured misrepresented his hair color (assuming the question was asked, which it would not be), it would not be deemed “material,” because that fact has nothing to do with the insured’s mortality risk. However, to use the previous example, failing to disclose cancer likely would be material, depending on the circumstances.

In brief, the failure to disclose a fact that is not significant to the assessment of risk and issuance of the policy should not be deemed a material misrepresentation. Thus, not all omissions or misrepresentations are “material.”

What if the insured made an innocent mistake?

This happens all the time. An insured might forget a part of his health history. In fact, many doctors will attest that when they take a history, patients often forget that they had or presently have certain conditions.

In addition, sometimes life insurance agents wrongly advise customers not to disclose certain conditions because they want to make a sale or believe the question is inconsequential.

Although there are exceptions, unfortunately, New York law in many cases does not excuse an innocent mistake in a life insurance application. This is why life insurance policyholders should be very careful when completing an application and always answer questions truthfully.

In New York are there defenses to material misrepresentations?

Sure, there are. In fact, you can visit our web page discussing this topic.

You can also read articles written by Eric Dinnocenzo on this topic: “The Postclaims Underwriting ‘Gotcha’” and “Life Insurance Denials Based on Material Misrepresentations: The Application Process, the Law, and Public Policy Collide.”

You should never rely on the decision of the life insurance company as the final word on whether the policy death benefit should be paid. A life insurance policy is a contract, and like with any contract, a party to it can sue the other contracting party when there is a breach.

A skilled life insurance attorney with knowledge of New York law can evaluate the application, policy, and underwriting guidelines to determine if a material misrepresentation was made or if the policy should rightfully be paid.

Please contact  New York Life Insurance Material Misrepresentation Attorney Eric Dinnocenzo at (212) 933-1675 to discuss if you have a valid life insurance denial claim.