Reliance Required to Prove Fraud
Another key element needed to prove the defense of fraud is reliance. The general rule is that an insurer need not suffer detriment or rely on an insured’s fraud before being allowed to declare a policy void. ‘If the insurer is deceived and could incur detriment if the deceit is successful, this is sufficient to establish the fraud defense. There is no need for the insurance company to wait to be damaged when the deceit itself is the proscribed activity, and the stated penalty is forfeiture of all benefits.
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