One of the principle ways insurers evaluate the risks posed by their insureds and assess the likelihood of potential claims when considering whether to issue a policy and how to price that policy is by means of insurance applications and traditional underwriting of those risks. Relying on representations made by their potential insureds, insurers can utilize traditional underwriting methods to try and set out both the extent of coverages to be offered as well the price of such coverage. Consequently, and to ensure the candor of the insureds’ responses, insurers are entitled to rescind the policies issued when insureds intentionally make material misrepresentations on their applications.

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