Bret is convicted of arson for burning down his warehouse to collect the in?surance.On an application for insurance from Cover-All Insurance Company on a new building,in answer to a question about prior convictions,Bret does not disclose his convic?tion.This makes the contract
A)binding because the omission is immaterial to Cover-All's decision to issue coverage.
B)binding due to Cover-All's failure to discover Bret's conviction.
C)voidable by Bret because the omission is immaterial to Cover-All's decision to issue coverage.
D)voidable by Cover-All because the omission is material to its decision to issue coverage.

Question

Quizplus · Accepted Answer

Bret's omission of his prior conviction for arson is material to Cover-All's decision to issue coverage. Cover-All has a right to know the risk they are insuring and Bret's prior conviction is relevant to the assessment of that risk. Therefore, Cover-All can void the contract due to the material misrepresentation made by Bret.

Bret Is Convicted of Arson for Burning Down His Warehouse