A New York appeals court held that the insurers did not have to cover a fire claim because two of the original applications for cover falsely alleged that the property was occupied by the owner. The insured also filled in mortgage application documents (on which the insurer was entitled to rely) to the effect that the property would be his “primary residence”.

The insured suggested that his broker had filled in the application form but it was found that he later ratified the misrepresentation by accepting the policy and allowing it to be renewed for several years.

In South African law the insured would automatically be bound by the representation made by the broker on the insured’s behalf.

(The case referred to is Michael Morales v Castlepoint)