Failure to Disclose a Previous DUI in Application for an Automobile Liability Policy Led to Rescission of the Policy

State Farm Mut. Auto. Ins. Co. v. Cockram & Powers (U.S. District Court M.D. Fla. 2012)

This case involved an action for declaratory relief to determine an insurer’s responsibilities and obligations under an insurance policy. The background facts were that the insured applied for automobile insurance but failed to disclose that he had recently been issued a DUI ticket. For reasons immaterial to the case, the insurer did not discover this fact until after a claim was made under the policy, at which point it rescinded the policy pursuant to Florida Statute section 627.409.

The Middle District of Florida ruled that the statutory rescission was proper and that the insurer owed no obligations under the circumstances. The court’s rationale was that: (1) “the failure to disclose the DUI ticket received two weeks before the application date constituted a misrepresentation to State Farm within the meaning of Fla. Stat. § 627.409(1)” and (2) “the undisclosed DUI ticket … was material [because it] is a fact which is important to both the acceptance of the risk and to the hazard assumed by State Farm[, and] it is undisputed that State Farm would not have issued the automobile policy had it been informed of the DUI ticket.”

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Tags: Rescission

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