Joan and Steven have applied for automobile insurance with ABC Auto Insurers. The ABC agent asked Joan and Steven if their resident 18-year-old son, Henry, has had any moving traffic violations in the past 2 years. Both answer no. The fact is, Henry had 4 speeding tickets, but never told his parents. Once the company found out about Henry's record, they voided the policy citing misrepresentation as the reason. Did Joan and Steve misrepresent Henry's driving record?

Joan and Steven have applied for automobile insurance with ABC Auto Insurers. The ABC agent asked Joan and Steven if their resident 18-year-old son, Henry, has had any moving traffic violations in the past 2 years. Both answer no. The fact is, Henry had 4 speeding tickets, but never told his parents. Once the company found out about Henry's record, they voided the policy citing misrepresentation as the reason. Did Joan and Steve misrepresent Henry's driving record?




A) No. They must have known about the tickets, but the company could not prove it.

B) No. They answered to the best of their knowledge.

C) No. The representation was not material.

D) Yes. Though not fraudulent, the misstatement was material.



Answer: D

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