In Louisiana an Intentional Misrepresentation on an Application Supports Rescission of Policy


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Insurance is a business of utmost good faith. Both the insured and the insurer owe to the other an obligation to do nothing that will deprive the other of the benefits of the contract. In Geovera Specialty Insurance Company v. Michael Odoms, No. 19-30971, United States Court of Appeals for the Fifth Circuit (November 5, 2020) Michael Odoms lied about his wife’s previous bankruptcy and, as a result, his insurer rescinded the policy after a fire one month after issuance of the policy.

ZALMA OPINION


The fact that the fire – to a house without gas or electricity – was an obvious reason for an insurer to be concerned about a potential arson-for-profit that resulted in the EUOs of the insureds. Because GeoVera was able to prove the material misrepresentations there was no need to deal with the reason for the fire only a month after the issuance of the policy.