In February, as we turn our thoughts to those we love, we should also be asking ourselves who could be considered a potential insured in our household and did I notify my insurance company of their presence.  If you don't do this analysis now, rather than when you have a need for coverage it might be too late as the insurance company could rescind, or void your policy for failing to disclose someone in your household who was a potential insured.  

The insurance company could deem it a material misrepresentation, or omission under the policy because they were not made aware of this person at the time of your application for insurance.  A material misrepresentation, or omission does not have to be intentional either, it might be a simple mistake, but could still result in a loss of insurance coverage.  

Under Florida Statute 627.409, if the material misrepresentation or omission was one that if the insurance company had known the true facts, they would not have issued the policy, would not have issued it at the same rate, would not have issued it in the same coverage amount, or would not have provided a particular coverage, then they can void the policy on this basis.  We have seen various different innocent situations over the years that have resulted in a voiding of an insurance policy due to an alleged material misrepresentation, or omission under that policy.  

For example, Grandma Savannah comes to stay with you because she no longer wants to live on her own.  She does not drive and thus does not own a car.  One day, a year later, while she is riding as a passenger in your vehicle she is seriously injured in an automobile accident.  The insurance company could void the policy as they were never notified of her presence in your household and the potential exposure she gives them to risk of having to pay under the policy.

Your adult son, Tyler moves in with you to save money for a year before he heads to Africa to climb Mount Kilimanjaro.  He owns his own vehicle and carries his own insurance.  One morning his car won't start so he borrows your car and is involved in an accident.  The insurance company could void your policy because of the failure to disclose to them that your son was residing in your home and could potentially be driving one of your vehicles or expose them to payment under your policy as a resident relative of your household.

Aunt Lindsay is living with you to help take care of grandma while you go to work.  She does not own a vehicle, but uses yours on occasion, especially to take grandma to her doctor's appointments.  This is once again another innocent scenario where an insurance company could void a policy based on a material misrepresentation, or omission under that policy.

You should also take note that the situation that causes you to be exposed to a rescission, or voiding of the policy did not have to necessarily exist at the time of your application for insurance.  It could be a situation that developed sometime after the initial application, but many insurance companies have a requirement that you continually update them about changes in your household including new residents who could be potential insureds under the insurance policy.  

We recommend that you regularly consult with your agent about those loved ones living in your home and make sure everyone is accounted for before an insurance claim needs to be made.