I draw your attention to the June 25 Tennessee Court of Appeals decision in the case of Dutton v. Tennessee Farmers Mutual Insurance Company which addressed the question of whether misrepresentations made on an initial policy application which unquestionably increased the risk of loss would still operate to void that coverage when multiple renewals of coverage had taken place. Dutton v TN Farmers. The applicants unquestionably made misrepresentations on the policy application which were material, specifically dealing with drug use and convictions for drug related crimes. After the policy was issued (based upon that application), time passed, and multiple renewals occurred. In pertinent part, the changes made to the policy included the deletion of the individual who had the drug related problems. The insured argued the changes to the policy meant the misrepresentations no longer had any bearing on the risk that Tennessee Farmers was insuring.

The Court of Appeals disagreed. It correctly focused its attention on the inception of the policy, citing to T.C.A. § 56-7-103, as well as provisions of the insurance policy. Given the fact the insurance policy was void from its inception, the changes to the policy by virtue of renewals and changes were, in the opinion of the Court, “of no effect.” Those renewals were dependent upon the original insurance policy, which was void from its inception due to the material misrepresentations on the original application which increased the risk of loss. The Court of Appeals also looked at a couple of other cases from different jurisdictions addressing similar arguments and ultimately held that material misrepresentations made on the original application rendered the policy void and prevented its attaching from its inception, and that subsequent renewals and deletions and additions, or changes of named insureds, did not operate to render the misrepresentations non-material. It, thus, reversed the trial court and entered judgment in favor of Tennessee Farmers.