Page 4 - Life Assurance

rate to defeat the insurer's rights to cancel at a
later time, under the doctrines of waiver

Generally even an innocent misrepresentation
of a material fact is no defense to the insured if
the insurer elects to avoid the contract. The
applicants for insurance speak at their own risk and
if they make an innocent mistake about a fact they
believe to be true, they are held for their
carelessness.

Thus, let us say that a person in applying for
insurance on his automobile states that there is
no driver under age 25 in his family. However, it
turns out that his 16 - year- old son has been
driving the family car without his father's
knowledge. Lack of this knowledge is no
defense when the insurance company refuses to
pay a subsequent claim on the grounds of
material misrepresentation. It is not necessary
for the insurer to demonstrate that a loss
occurred arising out of the misrepresentation in
order to exert its right to avoid the contract.

Thus in the above case, let us assume that
Hassan has the accident himself and then it is
learned for the first time he has a 16-year-old
son driving. Since this situation is contrary to
that which Hassan had previously stated, the
insurer may usually legally refuse payment.

However, if the court holds that a statement
given in the application was an opinion rather

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