If an insured’s misrepresentation constitutes a “warranty,” then the policy may be void ab initio.

A warranty is a representation of material fact by an insured that is incorporated into the policy. A false statement which amounts to a warranty can render a policy void ab initio if it satisfies a two-prong test. First, the representation must be expressly incorporated into the policy. Second, the policy must clearly and unambiguously convey that such false representations will render the policy void ab intio (though it need not use that precise language).

Case Law Alert - 1st Qtr 2011