If Lawyers Lie on Insurance Application Policy Rescinded
Post 4982
Read the full article at https://lnkd.in/gKK_9R6z, see the full video at https://lnkd.in/gpsuTi4W and at https://lnkd.in/gFATrdQU, and at https://zalma.com/blog plus more than 4950 posts.
In Schibell, Mennie & Kentos, et al v. Allied World Insurance Company et al, No. A-3144-22, Superior Court of New Jersey, Appellate Division (December 20, 2024) resolved the disputes.
KEY FINDINGS
Material misrepresentations in an insurance application allow the insurer to void the policy ab initio.
1. A fact is material if it would influence the insurer’s judgment in issuing the policy.
2. New Jersey law permits contract rescission based on equitable fraud without needing to prove the defendant’s intent to deceive.
3. The Firm’s application and renewals contained material misrepresentations, leading to the policy being void from inception.
Since the policy was void at inception due to these misrepresentations, Allied is not liable.
FACTS
The state Office of Attorney Ethics (OAE) found Schibell lied.
A special ethics master (SEM) recommended the Court suspend Schibell’s license for six months. The Disciplinary Review Board (DRB) issued a thirty-six-page opinion affirming the SEM’s findings that Schibell’s unethical conduct was established by clear and convincing evidence.
Schibell admitted he omitted the disciplinary action on his policy application. On October 28, 2019, Allied rescinded the malpractice policy to the Firm.
OPINIONS
The Appellate Division concluded that the undisputed facts established plaintiffs’ representation in the malpractice policy application and renewals were material and false and voided the policy ab initio (from its inception).
A fact is material if it naturally and reasonably influenced the judgment of the underwriter.
Equitable fraud does not require insurer to need not establish the defendant’s scienter.
The insurance contract at issue is void at its inception based on the material misrepresentation by the Firm in the initial policy application and continued throughout the renewals. The Appellate Division concluded that the plaintiffs’ misrepresentations voided the policy from its inception.
ZALMA OPINION
Much to the surprise of some litigants and their lawyers the covenant of good faith and fair dealing applies equally to the insured as it applies to the insurer. In this case, the insured lawyer and law firm, misrepresented to its insurer that it had not been disciplined by the state with full knowledge that the statement was false. Rescission was proper because the insurer relied on the statements made by the insured lawyer and law firm.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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National Flood Policy Bars Late Filed Suit
Post 5221
Read the full article at https://www.linkedin.com/pulse/one-year-suit-limitation-defeats-filed-two-years-zalma-esq-cfe-olr0c, see the video at and at and at https://zalma.com/blog plus more than 5200 posts.
No Excuse for Late Flood Suit After Claim Denial
In Domenico D’ambrosio, Michele D’ambrosio v. American Bankers Insurance Company Of Florida, No. 2:25-cv-155-KCD-NPM, United States District Court, M.D. Florida, Fort Myers Division (October 7, 2025) this is an insurance dispute stemming from Hurricane Ian. Plaintiffs Domenico and Michelle D’Ambrosio submitted a flood claim that Defendant American Bankers Insurance Company of Florida will not pay. To recover the funds allegedly owed, Plaintiffs sued for breach of contract.
Defendant’s moved to dismiss under Fed.R.Civ.P. 12(b)(6). Defendant presses one ...
ZIFL – Volume 29, Issue 21
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
Post 5220
Read the full article at https://lnkd.in/gRMJpi4s, see the video at https://lnkd.in/gwGSd6ZA & at https://lnkd.in/gbDiuFJy, and at https://zalma.com/blog plus more than 5200 posts.
See the video at & at https://rumble.com/v711hr0-zalmas-insurance-fraud-letter-november-1-2025.html
See the full 18 page issue of ZIFL at ZIFL-11-01-2025
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/
Conviction for Health Insurance Fraud Upheld
Physician Conspired with Bonavilla to Effect Health Insurance Fraud
Dennis Davin Bonavilla was involved in an insurance fraud scheme as an executive of Free Choice Healthcare. The scheme targeted indigent patients, often on ...
ZIFL – Volume 29, Issue 21
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
Post 5220
Read the full article at https://lnkd.in/gRMJpi4s, see the video at https://lnkd.in/gwGSd6ZA & at https://lnkd.in/gbDiuFJy, and at https://zalma.com/blog plus more than 5200 posts.
See the video at & at https://rumble.com/v711hr0-zalmas-insurance-fraud-letter-november-1-2025.html
See the full 18 page issue of ZIFL at ZIFL-11-01-2025
Zalma’s Insurance Fraud Letter (ZIFL) continues its 29th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/
Conviction for Health Insurance Fraud Upheld
Physician Conspired with Bonavilla to Effect Health Insurance Fraud
Dennis Davin Bonavilla was involved in an insurance fraud scheme as an executive of Free Choice Healthcare. The scheme targeted indigent patients, often on ...
The Professional Claims Handler
Post 5219
Posted on October 31, 2025 by Barry Zalma
An Insurance claims professionals should be a person who:
Can read and understand the insurance policies issued by the insurer.
Understands the promises made by the policy.
Understand their obligation, as an insurer’s claims staff, to fulfill the promises made.
Are competent investigators.
Have empathy and recognize the difference between empathy and sympathy.
Understand medicine relating to traumatic injuries and are sufficiently versed in tort law to deal with lawyers as equals.
Understand how to repair damage to real and personal property and the value of the repairs or the property.
Understand how to negotiate a fair and reasonable settlement with the insured that is fair and reasonable to both the insured and the insurer.
How to Create Claims Professionals
To avoid fraudulent claims, claims of breach of contract, bad faith, punitive damages, unresolved losses, and to make a profit, insurers ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
The History Behind the Creation of a Claims Handling Expert
The Insurance Industry Needs to Implement Excellence in Claims Handling or Fail
Post 5210
This is a change from my normal blog postings. It is my attempt. in more than one post, to explain the need for professional claims representatives who comply with the basic custom and practice of the insurance industry. This statement of my philosophy on claims handling starts with my history as a claims adjuster, insurance defense and coverage lawyer and insurance claims handling expert.
My Training to be an Insurance Claims Adjuster
When I was discharged from the US Army in 1967 I was hired as an insurance adjuster trainee by a professional and well respected insurance company. The insurer took a chance on me because I had been an Army Intelligence Investigator for my three years in the military and could use that training and experience to be a basis to become a professional insurance adjuster.
I was initially sat at a desk reading a text-book on insurance ...
