What information must be disclosed on an Insurance Application?

What happens if the information is wrong?

 The falsity of any statement in the application for any policy covered by this chapter shall not bar the right to recovery under the policy unless such false statement was made with actual intent to deceive or unless it materially affected either the acceptance of the risk or the hazard assumed by the insurer
§10380.

§The insured shall not be bound by any statement made in an application for a policy unless a copy of such application is attached to or endorsed on the policy when issued as a part thereof. ...
10381.5

 No insurer issuing or providing any policy of disability insurance covering hospital, medical, or surgical expenses shall engage in the practice of postclaims underwriting.

For purposes of this section, "postclaims underwriting" means the rescinding, canceling, or limiting of a policy or certificate due to the insurer' s failure to complete medical underwriting and resolve all reasonable questions arising from written information submitted on or with an application before issuing the policy or certificate.
§10384.

Please note, when reviewing codes, you may have to check what "Chapter" it's in.  The code cited, might be taken out of context.  This website is not legal advise, contact an attorney.

CHAPTER 3.  NEGOTIATIONS BEFORE EXECUTION
      Article 1.  Concealment .. 330-339

Article 2.  Representation .... 350-361

Ambiguity

In cases of uncertainty not removed by the preceding rules, the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist.
Cal.Civ.Code § 1654

Generally, when an applicant for life insurance is asked for material information about his medical history and does not give the specific information requested, the insurer is entitled to void the policy. (Ins. Code, §§ 331, 10380.)

Under California law, where insured fails to fulfill his or her obligation to marine insurer under uttermost good faith duty of disclosure, insurer is entitled to rescind and void contract.
Article 2.  Concealment and Representations--Rules Peculiar to
                  Marine Insurance ... 1900-1905

Under California law, applicant for marine insurance was bound by application form which he signed, even though form was filled out by insurer's agent and applicant chose not to read it.  
Pacific Ins. Co. v. Kent120 F.Supp.2d 1205C.D.Cal.,2000.
 

Marine insurance application's request for "purchase price" unambiguously referred to price paid for boat, not to applicant's subjective view of market value of boat, and thus applicant's knowing misstatement of amount he had paid for boat constituted misrepresentation warranting rescission under California law, even absent showing of materiality.
1900-1905
 

Under California law, insurance agent was under no duty to investigate marine insurance application to determine whether applicant's representations were false.
1900-1905.

Under California law, insurance agent assumes duties of reasonable care, diligence, and judgment in procuring insurance requested by an insured.
 

Case Examples  Knowledge of insured--In general

Generally where insurer makes no inquiry, and insured makes no representations as to facts in question, in absence of actual fraud such concealment is not ground for avoiding a policy, but in California there must first be actual knowledge of fact alleged to be concealed, and extent of such knowledge is tested by insured's good faith belief at the time of application, and subsequent events proving it to be unfounded or false are not sufficient to allow insurer to void the policy.
Ashley v. American Mut. Liability Ins. Co., N.D.Cal.1958, 167 F.Supp. 125.
 

If applicant for insurance had no present knowledge of facts sought, or failed to appreciate significance of information related to him, his incorrect or incomplete responses on application would not constitute grounds for rescission.
Thompson v. Occidental Life Ins. Co. of California (1973) 109 Cal.Rptr. 473, 9 Cal.3d 904, 513 P.2d 353.

Failure to mention, in application for insurance, existence of condition of which applicant has no knowledge or appreciation is not misrepresentation affecting validity of policy.
MacDonald v. California-Western States Life
Ins. Co. (App. 2 Dist. 1962) 21 Cal.Rptr. 659, 203 Cal.App.2d 440.

Failure to disclose facts of which applicant for insurance is ignorant will not warrant avoiding policy.
Travelers' Ins. Co. of Hartford, Conn., v. Byers (App. 1932) 123 Cal.App. 473, 11 P.2d 444.

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