Material misrepresentation(s) made by insured to his insurance carrier during the course of the presentation of homeowner's claim permits carrier to disclaim coverage based on policy language and gives rise to a cause of action under NJ Insurance Act.

In this United States District Court matter wherein the federal court interpreted New Jersey law in a diversity action brought by Certain Underwriters at Lloyds of London against its insured, Salvatore Alesia, alleging violations of the New Jersey Insurance Fraud Prevention Act. The plaintiff's insured (the defendant) had, prior to the initiation of this action, filed a homeowner's claim with the plaintiff alleging that vandals entered his home, stole a cache of expensive goods (inclusive of "three Samurai swords," a Rolex watch, and a washer and dryer, among others), and then left all of the faucets running before leaving. Based on an investigation, the plaintiff denied the defendant's claim and initiated affirmative litigation. During discovery, the defendant's estranged wife testified that the insured had, himself, removed the extensive array of goods reported stolen prior to filing his claim. Accordingly, the court found that the plaintiff had appropriately denied coverage based on policy provisions indicating coverage is unavailable where a theft loss is "caused by an 'insured'" or where an insured "engaged in fraudulent conduct." The court also found the defendant violated the New Jersey Insurance Fraud Prevention Act (N.J.S.A. § 17:33A-1(a)(1)), noting that such a violation is actionable even where the plaintiff has "not shown proof of reliance on [the insured's] false statement or resultant damages…nor proof of intent to deceive."