Michael has purchased a homeowner's (HO) policy from Acme insurance company. When Michael purchased the policy...
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Michael has purchased a homeowner's (HO) policy from Acme insurance company. When Michael purchased the policy it was written as Michael's primary residence. Three months later Michael files a claim for damage to the property. In the process of the investigation the insurer found that Michael has been using the home as a rental property. When asked Michael said that he thought the policy was written as a rental policy and got very upset because he believed that the insurer did not want to pay the claim. Is this a case of material misrepresentation? If so what steps should the insurer take next? Pay the claim and act as though nothing has happened? Rescind (void) the policy and reimburse Michael his 3 months of premium? Or pay the claim and reevaluate Michael's policy and charge the correct premium? Defend your position. Michael has purchased a homeowner's (HO) policy from Acme insurance company. When Michael purchased the policy it was written as Michael's primary residence. Three months later Michael files a claim for damage to the property. In the process of the investigation the insurer found that Michael has been using the home as a rental property. When asked Michael said that he thought the policy was written as a rental policy and got very upset because he believed that the insurer did not want to pay the claim. Is this a case of material misrepresentation? If so what steps should the insurer take next? Pay the claim and act as though nothing has happened? Rescind (void) the policy and reimburse Michael his 3 months of premium? Or pay the claim and reevaluate Michael's policy and charge the correct premium? Defend your position.
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This situation can be considered a case of material misrepresentation Michael misrepresented the nat... View the full answer
Related Book For
Ethical Obligations And Decision Making In Accounting Text And Cases
ISBN: 9781264135943
6th Edition
Authors: Steven Mintz
Posted Date:
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