Allstate Ins. Co. v. Boggs

• Decision Date: 14 July 1971
• Docket Number: No. 70-423,70-423
• Citation: 56 O.O.2d 130,27 Ohio St.2d 216,271 N.E.2d 855
• Parties: , 56 O.O.2d 130 ALLSTATE INS. CO., Appellee, v. BOGGS, Admx., et al., Inland Mutual Ins. Co., Appellant.
• Court: Ohio Supreme Court

Page 216

27 Ohio St.2d 216

271 N.E.2d 855, 56 O.O.2d 130

ALLSTATE INS. CO., Appellee, v. BOGGS, Admx., et al., Inland Mutual Ins. Co., Appellant.

No. 70-423.

Supreme Court of Ohio.

July 14, 1971.

Syllabus by the Court

1. Although an applicant's misstatement in an insurance application, if shown to be material to the risk and fraudulently made, is grounds for cancellation of the policy, such representation, standing alone, does not render the policy void ab initio and may not be used to avoid liability arising under the policy after such liability has been incurred.

2. In order for an insurer to successfully assert that an insured's misstatement as to his age in an insurance policy application is a strict warranty which makes the policy void ab initio, the insurer must include a statement in the policy it issues to the effect that such a representation as to age in the application is a warranty or incorporate by reference the application into the policy.

3. For an insurance application to be incorporated by reference in an insurance policy, the incorporating language must be unequivocal and appear on the face of the policy; the mere fact that the policy refers to the application does not make the application a part of the policy.

This is an action for declaratory judgment to determine which of two insurance policies was applicable to an automobile accident.

The case was tried on an agreed statement of facts.

In December 1966, one William Boggs and Dallas E. Christopher, each driving a separate motor vehicle, were involved in an automobile accident. Both drivers were killed. A guest in Boggs' car brought an action for injuries, and an action for the wrongful death of Boggs was brought against the estate of Christopher.

At the time of the accident, appellee, Allstate Insurance Company, had in full force and effect a policy covering the car operated by Boggs. The policy included uninsured motorist coverage. Appellant, Inland Mutual Insurance Company, had in effect a policy issued to Christopher. The policy was issued upon Christopher's application, in which he stated that no driver under 25 years of age would operate the vehicle and that he had been involved in three prior accidents and/or traffic violations. From the exhibits attached to the stipulation it appears that Christopher, although he represented that he had been born in 1940, had, as a matter of fact, been born in 1943, and had been involved in four rather than three traffic violations or accidents. It should be noted that, in the accident reports and the reports on the traffic tickets he received prior to the time of the issuance of the policy, Christopher was consistent in representing that he was born in 1940.

When Inland discovered these facts, it cancelled the policy and refused coverage of the accident on the ground that its policy was void ab initio. It is stipulated that Inland would not have issued the policy had it known the correct age of Christopher. It is not stipulated that it would not have issued the policy because of the additional traffic violation. There is nothing to show that Christopher deliberately misrepresented either his age or the number of traffic violations.

The trial court found that Inland's policy was in full force and effect at the time of the accident.

The Court of Appeals affirmed, and the cause is before this court pursuant to the allowance of a motion to certify the record.

Edward J. Utz, and James Gustin, Cincinnati, for appellee.

McIntosh & McIntosh, Cincinnati, for appellant.

C. WILLIAM O'NEILL, Chief Justice.

The primary question raised by this cause is whether a misstatement of age by an insured in an application for an automobile liability insurance policy renders the policy void ab initio.

Statements by an insured fall into two classes-those which constitute warranties, and those which constitute representations.

The consequences of a misstatement of fact by an insured are entirely different, depending on whether the statement is a warranty or a representation. If the statement is a warranty, a misstatement of fact voids the policy ab initio. However, if the statement is a representation, a mistatement by the insured will render the policy voidable, if it is fraudulently made and the fact is material to the risk, but it does not void the policy ab initio.

In the law of insurance, a representation is a statement made prior to the issuance of the policy which tends to cause the insurer to assume the risk. A warranty is a statement, description or undertaking by the insured of a material fact either appearing on the face of the policy or in another instrument specifically incorporated in the policy. Hartford Protection Ins. Co. v. Harmer (1853), 2 Ohio St. 452. See 30 Ohio Jurisprudence 2d 415, Section 460.

The...