12th Dec 2017

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In general

First party claim

In first party property losses an insured must provide the insurer with a proof of loss signed by the insured, within sixty (60) days. See § P105 PROOF OF LOSS [§ P105:1] Thereafter, the insurance company after investigation of the loss may deny the claim on the grounds that the insured made misrepresentations of fact. See § C61 CONCEALMENT, FRAUD (PROPERTY POLICY). In this circumstance the insured may contend memory loss or forgetfulness as an explanation for alleged misrepresentations of fact.


Generally, the issue of whether an insured’s false statement is knowingly and intentionally made with knowledge of its falsity and with the intent of defrauding the insurer is a question of fact. However, “intent to defraud the insurer” is necessarily implied when the misrepresentation is material and the insured wilfully makes it with knowledge of its falsity. [Cummings v. Fire Ins. Exchange (1988) 202 Cal. App. 3d 1407, 1417-1418] Significant and unexplained misrepresentations cannot be explained away by unsubstantiated claims of “memory” problems. [Castro v. State Farm (N.D. Cal. 2017) 2017 WL2462203, page 6 (the insured in fact had traumatic brain injury in 1981; however insured presented no medical testimony by a physician that could support the insured’s memory loss as to significant and conflicting misrepresentations of fact)]

References in bold are to Mr. Cornblum’s text CALIFORNIA INSURANCE LAW DICTIONARY AND DESK REFERENCE, 2017 Edition, published by ThomsonReuters (1-800-344-5008 to order 3-Volume text).

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