Kelly v. State Farm Fire and Casualty Co.

ORS 742.208 requires that fire insurance policies contain the provision that concealment, misrepresentation, or fraud of material facts by the insured voids the entire policy. A misrepresentation is material if it is “relevant and germane to the insurer’s investigation as it was then proceeding.” Callaway v. Sublimity Ins. Co., 123 Or App 18, 23 (1993). 

Kelly appealed the trial court’s grant of summary judgment to State Farm. The lower court held that Kelly’s home insurance contract with State Farm was void due to Kelly having made misrepresentations during State Farm’s claim investigation after a fire destroyed Kelly’s house. After denying coverage on his claim, State Farm invoked the affirmative defenses regarding the concealment, misrepresentation, or fraud provisions in the home insurance policy, which State Farm cited that Kelly willfully concealed facts and made misrepresentations regarding his income, work history, incarceration, residency, and additional living expense claims. Kelly appealed and argued that his misrepresentations were not material. ORS 742.208 requires that fire insurance policies contain the provision that concealment, misrepresentation, or fraud of material facts by the insured voids the entire policy. A misrepresentation is material if it is “relevant and germane to the insurer’s investigation as it was then proceeding.” Callaway v. Sublimity Ins. Co., 123 Or App 18, 23 (1993).  State Farm’s policy provision reflected the language of ORS 742.208. The Court held that Kelly willfully concealed facts and his misrepresentation about his rental residency was material therefore the entire policy was void. Affirmed.