It was undisputed that information for the issue of a homeowners policy was given to an agent by telephone by the owner of a house who sought coverage. The agent completed the application, which was signed by the applicant when he then visited the agency office and coverage particulars were discussed. A policy was issued by the insurer to which the application was submitted on the basis of the data in it.

When the dwelling was destroyed by fire, the insurer advanced $20,000 to the insureds (husband and wife) for immediate needs, but denied further coverage for the fire loss on the grounds that two material misrepresentations in the application rendered the insurance policy voidable. In the course of legal proceedings, the insurer was granted summary judgment on its claim for recession of the contract. The insured appealed.

One of the statements in the application identified as a material misrepresentation by the insurer was that the applicant did not have a loss history. The home involved had, in fact, been destroyed by fire and rebuilt two years before the completion of the application. Secondly, a "no" answer was given to a question as to whether insurance had been declined or canceled. Another insurer had actually canceled a policy a year earlier because of the loss history.

On appeal, the insureds stressed that they did not make a "knowing" misrepresentation, as the agent put incorrect information in the application without their knowledge. They also asserted that any claimed misrepresentations were not material.

The appeal court said that "....common sense tells us that an applicant's prior loss history is material to a reasonable insurance company's decision whether to insure...."

On the binding effect of the application, the court said that, under Connecticut law, "....a person may not claim that a misrepresentation is 'innocent' solely because the person failed to read the application before signing it." It looked back to 1874 for pertinent guidelines, as follows, in Ryan v. World Mutual Life Insurance Company, 41 Conn. 168, 172 (1874): "The law requires that the insured shall not only, in good faith, answer all the interrogatories correctly, but shall use reasonable diligence to see that the answers are correctly written."

The court concluded that the applicant endorsed the misrepresent-ations in the application when he signed it. He became responsible for any misstatements when he did so. There was no evidence that he was pressured to sign the application. By his own admission, his failure to review it was carelessness on his part.

The judgment of the trial court was affirmed in favor of the insurance company and against the insureds.

(PINETTE ET UX., Plaintiffs-Appellants v. ASSURANCE COMPANY OF AMERICA, Defendant-Appellee. United States Court of Appeal for the Second Circuit. No. 94Ä7622. April 7, 1995. CCH 1995 Fire and Casualty Cases, Paragraph 5202.)