Who is filling out your insurance application and is it accurate?

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My agent completed an application that was not accurate or complete, and the insurance company denied my claim based on misrepresentation. I never saw the application.

 Inaccurate applications can cause a coverage denial later. For example, if you said that the building was 70% occupied and it was actually 70% vacant, you will have a problem.

 Accuracy and completeness of information are essential.

 If an agent completes an application, it is binding on you in Michigan even if you did not sign it or see it. This is because the agent is legally your agent.

 ACORD applications are the standard application universally used by insurance companies. It is virtually impossible to completely answer these applications without making misrepresentations.

These are just a few of the questions on the standard application:
o Any exposure to flammables, explosives, chemicals? (Everyone has flammables and chemicals of some sort.)
o Any catastrophe exposure? (Wouldn’t a building fire be a catastrophe?)
o Any policy or coverage declined, cancelled or non-renewed during the prior three years? (Typically, only your agent knows if an insurance carrier declined your account.)
o Any uncorrected fire code violations? (Does this mean that you have not complied with the building codes or that you have been cited?
o Any past, present or discontinued operations involving storing, treating, discharging, applying, disposing or transporting of hazardous material? (Even light industrial operations and  offices have waste. How is “hazardous” defined?)
o Any employees under 16 or over 60 years of age? (Almost every business would have to say yes to this one.)
o Any seasonal employees? (Is the college student in the summer seasonal?)
o Any employees with physical handicaps? (We all have some physical handicaps, whatever that means.)
o Any employees traveling out of state? (Most employers have employees that may travel infrequently out of the state.)
o Any athletic team sponsored? (Many employers send a check to help out a church or other team. Does this constitute sponsorship?)
o Any hold harmless agreements? (Every insured has these in almost every agreement they execute.)
o Any vehicles used by family members? (Does this mean once a year when I loan my car to my wife?)
o List underlying insurance coverage information (include all restrictions). (You would have to copy every insurance policy.)
o List laser endorsements. (Does an insured know what this is?)
o Any subrogation waivers or extensions of coverage? (Again, you will have to copy and attach every policy you have in place.)
o Give details of all liability claims exceeding $10,000 or occurrences that may give rise to claims during the past 5 years, whether insured or not. (Would you even know what occurrences may give rise to a claim?)

 The incomplete or inaccurate answers to these and other application questions could be the cause for a claim denial or policy rescission.

 Answer ambiguously if necessary when it is impossible to answer a question yes or no. For example, the answer should be “always possible” to the question “any employees with physical handicaps?” (What is a “physical handicap” anyway?)

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