Minor Claims Fraud Voids Entire Policy

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After a fire destroyed plaintiff’s house, plaintiff made a claim on his homeowner’s insurance policy with defendant insurer. Defendant investigated and ultimately denied the claim. Plaintiff sued and in response defendant asserted that the insurance contract was void due to plaintiff making misrepresentations during defendant’s claim investigation. The trial court granted summary judgment for the defendant, based on the contract being void. In Matthew Kelly and Shelly Kelly State Farm Fire And Casualty Company, an Illinois corporation, 312 Or App 361, No. 422 A169464, Court Of Appeals Of The State Of Oregon (June 16, 2021) the Court of Appeals was asked to interpret the statutory fraud language in the policy.

ZALMA OPINION

The Oregon Court of Appeal applied the law as written. Presenting a false claim to an insurer with knowledge that it is false voids the entire policy. The amount of the fraud is irrelevant. An insured cannot say: “You caught me on the $3600 claim but must pay the legitimate part of my claim.” To do so would emasculate the reason for the Concealment, Misrepresentation or Fraud provision of the policy. A little fraud voids the entire contract just as easily and importantly as a big fraud.