A statement is material under this standard if the statement could influence the Administrator's decision concerning the certificate. In practice, an incorrect answer on a medical certificate application is a false representation and every question on the application is material, so the first two elements of this test are virtually always met. Furthermore, the NTSB has indicated in past cases that a willful disregard for truth or falsity when answering a medical application can amount to intentional falsification. In other words, failure to carefully read the questions on the medical application and answering incorrectly is not a defense to intentional falsification.
We know how the FAA reacts to intentional falsification. The making of a single false entry—whether in a pilot logbook, a maintenance record, or on a medical application is grounds for revocation of all certificates held by the airman.
Lying to the FAA regarding your health history may also void your insurance. In Ranger Insurance Company v. Bowie, a pilot concealed his heart trouble from the FAA before later dying in an aircraft accident. The heart condition the pilot had concealed would have disqualified the pilot from receiving any medical certificate. The pilot’s insurance policy required that the pilot needed to hold a “valid” medical certificate to be covered. The Texas Supreme Court concluded that because of the intentional falsification of the pilot regarding the heart issues, the pilot did not have a “valid” medical and thus the insurance company decision to not cover the claim was held valid.
Other courts have ruled similarly. A North Carolina court in 1983 in Bellefonte Underwriters Insurance Company v. Alfa Aviation found that a “valid” pilot certificate includes a medical certificate. In Bellefonte, the court considered whether a pilot who did not hold a medical certificate had a “valid” pilot license, as was necessary for the insurance company to cover the pilot. The Bellefonte court held because the pilot did not hold a medical certificate, the insurance company could deny coverage for an accident.
A federal court case in Virginia in 2000 entitled U.S. Specialty Ins. Co. v. Skymaster of Va., Inc., found that a diabetic pilot who had concealed his condition in obtaining a medical certificate was properly denied coverage by the insurance company for a lack of “current and proper” certificate. Similarly, in a federal court case in 2022 in Wisconsin, a pilot who allowed his medical to lapse after being denied a special issuance held that the insurance company permissibly denied coverage for a fatal accident. There are more similar cases from courts in Vermont, Louisiana, and Kansas.
These cases are from states that have found that the event requiring insurance coverage does not have to be causally connected to the injury and that is the majority view. Causal relationship or connection is one where a cause of accident is related to the reason the breach of an exclusion limiting coverage. In other words, can an insurance company deny coverage if a fuel truck hits your unoccupied parked aircraft when the insurance company requires you have a valid medical and you don’t? The minority view is to require a causal connection between the policy reason for exclusion of coverage and the casualty before allowing an insurance company to deny coverage. Although dated, a law review article, Jon Kettles et al., The Causal Connection Question in Aviation Insurance Coverage, 75 J. Air L. & Com. 829 (2010), does a 50-state survey on the subject.
In states that require causal connections between the medical condition and the loss, expect a high level of scrutiny in litigation as to the medical deficiency of the pilot, whether it was a material factor in the insurance policy, and whether it figured in to the claim.
In a system that requires honest and self-reporting of pilots, there are severe penalties to those who do not.
