If an insurer discovers that the insured withheld material facts after making interim payments, what is the maximum recovery amount for the insurer?

In the context of insurance, when an insurer discovers that the insured has withheld material facts, this can significantly affect the insurer's obligations and the validity of the insurance contract. When the insured has provided misinformation or failed to disclose relevant information, the insurer may have the right to recover the interim payments made.

In this scenario, the maximum recovery amount for the insurer would be dependent on the terms of the insurance policy, as well as applicable laws and regulations surrounding insurance and contract governance. Generally, if it is found that material representations have been intentionally withheld, this can lead the insurer to potentially reclaim all amounts that were improperly paid based on that misinformation.

The figure presented as the maximum recovery amount suggests an awareness of the types of damages and evidence the insurer could pursue, depending on the materiality of the facts that were concealed and the impact those facts had on the insurer's risk assessment.

While lower amounts may be possible in different scenarios or under specific policies, the highest amount indicated reflects a situation where the insurer has strong grounds to reclaim the interim payments due to the severity of the misrepresentation. This reinforces the principle within the insurance industry that honesty and full disclosure are paramount in the relationship between insurers and insured parties. The liability of the insured for misrepresentation is often