Insurance- Information Obtained From Third Persons

Section 43. When a person insured has no personal knowledge of a fact, he may nevertheless repeat information which he has upon the subject, and which he believes to be true, with the explanation that he does so on the information of others; or he may submit the information, in its whole extent, to the insurer; and in neither case is he responsible for its truth, unless it proceeds from an agent of the insured, whose duty it is to give the information.

What is the effect where information is obtained from third persons?

Under Sec. 43, the insured is given discretion to communicate to the insurer what he knows of a matter of which he has no personal knowledge.  If the representation turns out to be false, he is NOT responsible therefor, provided he gives the explanation that he represents so on the information of others.

Example:

If the insured has no personal knowledge of the causes of the death of his parents because they died when the injured was still an infant, he may report information obtained from friends and relatives if he likes.  In which case, he is not responsible for the truth of the information.

What is the effect where information is obtained from the agent of the insured?

If the information proceeds from an agent of the insured, whose duty it is in the ordinary course of business to communicate such information to his principal, and it is possible for the agent under such circumstances in the exercise of due diligence to have made such communication before the making of the contract, the insured will be liable for the truth.