§10.2 Effect of Misrepresentation by Insured in Proof of Loss

The Case: McConkey v. Continental Ins. Co., 713 S.W.2d 901 (Tenn. Ct. App. May 22, 1984).

The Basic Facts: Plaintiff insured sued insurer for failure to pay claim in a timely matter. Insurer claimed that insured made material misrepresentations in the proof of loss.

The Bottom Line:

• "The court was obviously convinced that all the contents claimed to be in the house were not there, but failed to elaborate further on the issue.

  Policies of fire and property indemnity insurance usually provide that any fraud or false swearing on the part of the insured, whether before or after loss, shall relieve the insurer from liability. Under such a provision, false statements as to material matters wilfully made by the insured in proofs of loss with the intention of thereby deceiving the insurer will preclude any recovery on the policy by the insured; ... . This rule is applicable, for example, to the following: an overvaluation of the property insured; ... the inclusion in the proofs of property not destroyed; ... .
  
  'If a false statement is knowingly made by the insured with regard to a material matter, the intent to defraud will be inferred... . . Furthermore, the insured's knowledge of the falsity of the statements made by him need not be absolute in order to work a forfeiture of his rights under the policy. It is sufficient if he swears with disregard to the truth or swears to matters as true within his knowledge when in fact he knows little or nothing about them.' 44 Am. Jur. 2d Insurance § 1371, p. 299-300."

  713 S.W.2d at 906.

Other Sources of Note: In PacTech, Inc. v. Auto-Owners Insurance Co., 292 S.W.3d 1 (Tenn. Ct. App. Sept. 22, 2008), perm. appeal denied, (Apr. 27, 2009) the holding in McConkey was cited with approval.

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