"Best knowledge and belief".

• Author: Hart, Jerold
• Position: Insureds' misrepresentations in medical insurance applications and denial of coverage - Florida

The insurer now has the obligation to inquire as to the medical condition of the applicant prior to the issuance of the policy or else coverage will apply.

How many times have you heard an insurer deny coverage due to a material misrepresentation on an insured's application for insurance? Under what circumstances may an insurer rescind coverage for misrepresentation in an insurance application? Often premiums are refunded to the insured; the claim file is closed; and the obligation is terminated. Insurers argue that any material misrepresentation lays the groundwork for the insurance carrier to deny the claim brought by the insured and thus void the insurance policy.

Green v. Life & Health of America

The Florida Supreme Court recently paved a new avenue in the realm of "material misrepresentation" in Allen Green v. Life & Health of America, 704 So. 2d 1386 (Fla. 1998). In Green, the Supreme Court looked at the issue of an insured's "best knowledge and belief." The court held that when the phrase "best knowledge and belief" is found in an application for insurance, a factual issue arises as to whether the applicant had knowledge of a previous medical condition which would negate coverage. Absent express fraud in the insurance application, as found in Continental Assurance Co. v. Carroll, 485 So. 2d 406 (Fla. 1980), the applicant cannot be denied coverage unless there is extrinsic evidence to show that the applicant knew of the condition which he or she denied in the application for insurance coverage.

In Green, Harold Green completed an application for insurance coverage with Life & Health of America, a home health care insurer. The application asked Mr. Green whether to the best of his knowledge and belief he had ever had kidney failure or chronic obstructive pulmonary disease.[1] Mr. Green responded in the negative. The evidence showed that while Mr. Green, an octogenarian, was suffering from what his physicians diagnosed as chronic obstructive pulmonary disease and renal failure, Mr. Green did not know of the medical conditions because his treating physicians never informed him that he had the specific diseases. Rather, his physicians told Mr. Green that he had "sluggish kidneys, a little asthma, and a little bronchitis."[2] Mr. Green was totally unaware of his true condition and, therefore, had no reason to reveal such a diagnosis on his application for insurance.

Mr. Green later made a claim under the policy. The insurer denied the claim on the basis that there was a misrepresentation on the application of insurance and, therefore, the policy should be canceled and premiums returned.

Harold Green sued Life & Health of America, Inc., on the denial. When Harold Green died, his estate proceeded forward. The record reflected that Life & Health of America did no investigation before issuing the policy, although a treating physician was listed on the...