Indiana Appellate Comments

     In insurance law, the insured has the initial burden to make accurate representations in the application.  If an insurance policy is issued, the insurer then has the burden to issue a policy with clear language and provide insurance according to the policy's terms.  Because the insurer is charged with writing an unambiguous policy, if a dispute between the insured and insurer turns on a term that is deemed ambiguous the policy is interpreted in favor of coverage. 

     In Allied Property & Casualty Ins. Co. v. Good, the Court of Appeals held that a policy is void ab initio and summary judgment should be entered in favor of the insurer when the insured makes a material misrepresentation on the application for insurance.  Specifically, the Court held:  "Because the uncontradicted evidence indicates Linda misrepresented the Goods' cancellation history on the application for homeowners insurance and Allied would not have issued the policy if it had known the truth about their history, the trial court erred by denying Allied's motion for summary judgment."

     Of note, Indiana appellate courts have stated that an ambiguity does not exist merely because the parties proffered differing interpretations of the policy language.  In this case, no ambiguity was found even though one of the three judges on the appellate panel interpreted the disputed language in the policy differently.  In dissent, Judge Bailey opined that the insured may not have provided misinformation in the application.  Judge Bailey further stated that, even if the insured provided misinformation, an insurer's use of a self-serving affidavit may not be sufficient to prove the materiality of the misrepresentation.