Proving Applicant's Misrepresentation in an Online Insurance Application

A recent decision of the New Brunswick Court of King's Bench shines light on possible difficulties for insurers seeking to prove an applicant's misrepresentation in the era of online insurance applications.

The Insurer's Burden

Fundamental to the law of insurance is the principle that an applicant for insurance must make good faith disclosure of the risk to be insured so that the insurer can properly assess the risk and set an appropriate premium. This principle is embodied in the standard statutory conditions that void an insurance contract where the applicant falsely describes the property to the prejudice of the insurer, or misrepresents or fraudulently omits to communicate information that is material to the risk.

Where it seeks to rely on a misrepresentation to avoid coverage, the insurer has the burden to prove exactly what the applicant misrepresented. This typically involves proof of what the application asked for and what answer the insured gave.

What Happened in Trecartin

One of the issues in Trecartin was whether the defendant Sonnet met its burden to prove a misrepresentation in an online application form. The New Brunswick statutory condition considered in Trecartin reads as follows:

If a person applying for insurance falsely describes the property to the prejudice of the insurer, or misrepresents or fraudulently omits to communicate any circumstance that is material to be made known to the insurer in order to enable it to judge the risk to be undertaken, the contract is void as to any property in relation to which the misrepresentation or omission is material.

Substantially similar statutory conditions are found in the insurance statutes of the other common law provinces and territories.

The Plaintiff, Trecartin, obtained a home policy from Sonnet in July 2021 for a residential property in New Brunswick. He completed an online application through Sonnet's website. Fire destroyed the property on November 3, 2021. Sonnet subsequently denied indemnity under the policy for several reasons, including an assertion that Trecartin misrepresented in the online application that the property was occupied.

Sonnet applied for summary judgment. While successful on the question of whether the policy's vacancy exclusion applied, Sonnet was unsuccessful in proving the misrepresentation. The court's decision provides helpful insight for insurers whose application processes include reliance on online applications.

Where the Evidence Fell Short

Sonnet’s presentation of the application content was deficient, possibly a consequence of taking the application process online. Sonnet produced in evidence an application template from 2025 (when the application was heard, rather than 2021 when the application was made), and certain "internal database screenshots". The court was unable to accept that, based on the 2025 application template, Sonnet had proved the content of the questions posed in the 2021 application. Sonnet's database screenshot included the following text: "How is the dwelling occupied — owner occupied" apparently with little or no explanatory context. This, on its own, without the question posed, was inadequate to prove a misrepresentation by Trecartin. The court concluded:

"Sonnet is accusing Trecartin of a misrepresentation at the application stage but provided no concrete evidence of that misrepresentation. Rather, Sonnet suggests the court should conclude Trecartin made a misrepresentation by drawing an inference on the answer Trecartin could have provided on his application for insurance. Yet, there is no certainty as to the question asked and no certainty on the answer provided.

Considering the possible consequence of a misrepresentation, which could lead to the voiding of the policy, more evidentiary rigor is required. To rely on a possible question and possible answer in support of an allegation of misrepresentation, the court needs more evidence capable of supporting such an inference."

Electronic Record-Keeping Matters

The court also noted that:

 "… there is no evidence of the data management and storage of information obtained from Sonnet's online applications. … insufficient particulars were provided to support the suggestion that the data provided to the court emanates from answers provided directly from Trecartin during his application for insurance."

While rejecting Trecartin's suggestion that Sonnet was suppressing the application because what it contained was adverse to Sonnet's position, the court concluded that,

"In this case, it appears more likely that the advent of electronic records within the organization has led to deficient electronic record keeping".

The misrepresentation issue was therefore something that could not be resolved on a summary judgment application and without a trial.

What Insurers Should Take From the Decision

Insurers that have implemented, over the past number of years, online application procedures have most likely done so to create convenience for clients in applying for insurance from home and efficiency for themselves in processing applications. However, it is important to recall that insurance applications exist not just to generate new contracts and premiums.

Rather, the content of the application is fundamental to the good faith obligations of the applicant/insured and the rights of the insurer to rely on the applicant’s answers and not to be saddled with greater risks than it bargained for.

For that reason, insurers using online processes for insurance applications would benefit from having processes that permit the data that an online application generates to be recorded and stored in a readable format that the insurer can rely on in the future to prove verbatim the questions posed in the insurer’s application portal and the applicant’s verbatim answers.

In order to succeed on a misrepresentation defence an insurer likely needs evidence about how its business practices include the storage of online application data in a readable format that preserves the questions posed to the online applicant for insurance and the applicant’s answers.

Insurers using online applications should ensure they can reproduce the exact questions asked, answers provided and records showing how that information was captured and stored.  Contact Michael Doerksen or any member of Field Law’s Insurance Group to discuss how your application and record-retention processes may hold up if a misrepresentation claim is challenged.

Link to decision: Trecartin v. Sonnet Insurance Company, 2026 NBKB 96