The Mississippi Supreme Court determined that an insurance agent was negligent in preparing and submitting an application for property insurance. A trial court had concluded that the insured's recollection of a loss that he believed had occurred somewhat more than five years earlier warranted verification of the date by the agent. He had not done so and was found liable to the insured for loss payment denied by the insurer. Appeal followed.

The insurance company had paid its obligation to the bank that held a mortgage on the insured's home after the structure was totally destroyed by fire. It refused further payment to the insured because of a misrepresentation he made in the application for insurance.

The application stated "no" in answer to whether the applicant had sustained a fire loss within the last five years. The record showed that he had been paid $41,000 by an insurer for a fire loss 4 1/2 years earlier. The insured sued the agent to recover his loss, alleging negligence in completion of the application.

It was established that the agent had completed the application for the insured based on oral answers, by the then applicant, to pertinent questions. The applicant had then read the application and signed it. The agent testified that the applicant advised that he did not have a fire loss within the last five years. The insured (applicant) testified that he had told the agent that he thought it was over five years previously that he had a fire loss on a farm. He said he wasn't sure about the date.

The agent said that none of the companies that he represented would have issued a policy if the date of the prior loss had been made known. The insured said that he would have looked elsewhere for insurance if he had known that he would not have been covered for the loss that occurred.

The high court concluded that the agent "....did not exercise reasonable diligence in investigating (the applicant's) statement on previous fire loss." It found the evidence "substantial" that the applicant disclosed the fire to the agent in a manner that warranted further inquiry and date verification by the agent.

The judgment of the trial court was affirmed in favor of the insured and against the agent.

(LOVETT, Appellant v. BRADFORD, Appellee. Mississippi Supreme Court. No. 92-CA-00802-SCT. May 30, 1996. CCH 1996 Fire and Casualty Cases, Paragraph 5787.)