When Otto applied for insurance cover for his house he fraudulently failed to disclose that the foundations of his house were cracked.Six months after the insurance policy was taken out Otto's house was accidentally destroyed by fire.Which of the following statements is true?
A) The insurer is not obliged to pay Otto's claim.
B) The insurer is probably obliged to pay Otto's claim minus the extra premium the insurer would have charged if it had known about the weak foundations.
C) The insurer is probably obliged to pay Otto's claim in full.
D) The insurer is obliged to pay the claim but it can cancel Otto's policy.
Correct Answer:
Verified
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