Speedy Shipping Corporation applies to TransInsurance Company for a fire insurance pol?icy on Speedy's warehouse.On the application,Speedy misrepresents the age of the property to obtain a lower premium.When a fire soon destroys the ware?house,TransInsurance can

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TransInsurance can deny payment because Speedy made a misrepresentation on the application, which constitutes fraud. Misrepresentation is a false statement of fact made by the insured when filling out the application, which induces the insurer to issue the policy. In this case, Speedy's misrepresenting the age of the warehouse to obtain a lower premium was a material misrepresentation that induced TransInsurance to issue the policy. Therefore, TransInsurance can deny payment based on fraud.

Speedy Shipping Corporation Applies to TransInsurance Company for a Fire