New York has a reputation as a state that's pretty friendly to consumers, so I think it's notable that an appellate court last month voided a Homeowners insurance policy because the insured lied on the application. George Perkins, who owned a dog, answered "no" to the question on the application asking whether he owned any animals or exotic pets. Two years later, his dog bit someone visiting the home; the victim suffered "significant injuries." When the insurance company received notice of the claim, it sent a cancellation notice on the grounds that the risk had changed -- the insured now had a "vicious dog." Almost a year later, the insurer found out that the protective pooch had been living there all along. The insurer sought to void the policy. As you can well imagine, lawsuits ensued. Incredibly, the trial court found the question on the application to be unclear and ruled against the carrier.
The Appellate Division's Third Department (the same department that will consider IIABNY's appeal concerning Regulation 194) reversed the trial court, saying, "(W)e find no ambiguity because, while a dog is not an exotic pet, it clearly is an animal..." This is a polite way of saying, "Give me a break."
It's fashionable to be cynical and believe that judges today lack common sense. This decision is exhibit A for the opposite argument. Long-time readers of this blog know that my heart melts at the sight of a dog, but both the insurer and the appellate court got it right on this one. The requirement for dealing in good faith goes both ways. Tell the truth on your insurance applications.