The sole substantial question in this hoary claim which soon rounds out its tenth year is whether, to avoid the policy because of fraud, misrepresentation, concealment and false swearing by an assured in connection with a loss for windstorm damage from the Miami hurricane of September 17, 1947, the insurer must prove that it relied, to its detriment, prejudice and damage, upon such fraudulent acts.
The issue is squarely posed. First, the contract1 is categorical. Second, the assured for this appeal virtually concedes, as the record requires in any event, that there was ample evidence to warrant the inference by the jury that the assured knowingly made false, untrue statements and representations on substantially material matters in connection with the loss.2 Third, the Court, without requiring proof or finding of *891prejudicial reliance, very precisely instructed3 the jury to return a verdict for the insurer if they found that the assured had wilfully made intentional *892false statements of material facts, Finally, the assured, by requested charges 4 and exceptions, articulately directed the Court’s attention to his contention that reliance and prejudicial detriment had to be shown to void the policy for misrepresentation false statement, concealment and raud.
We think that, as against this attack, the Court’s charge was eminently correct. We start, first, .with a contract which, plain in its terms, cannot be ignored by invoking the principle which deplores forfeitures, Fidelity-Phenix Fire Insurance Co. of New York v. Benedict Coal Corporation, 4 Cir., 64 F.2d 347, certiorari denied 289 U.S. 762, 53 S.Ct. 795, 77 L.Ed. 1505, or construes policies most strongly against the insurer and in favor of the assured, Palatine Insurance Co. v. Whitfield, 73 Fla. 716, 74 So. 869. Thus the agreement of the parties called precisely for honesty and fair dealing by the assured and unless there be a public policy against people contracting to be honest and refraining from wilful false swearing and misrepresentation, it is a contract which, as any other, ought to be enforced. Taking our Erie lights, as best we can, Meredith v. City of Winter Haven, 320 U.S. 228, 238, 64 S.Ct. 7, 88 L.Ed. 9, 15, Florida, whose policy controls here, recognizes this, we think, as a valid area for contract, American Insurance Co. of Newark, New Jersey v. Robinson, 120 Fla. 674, 163 So. 17, see Hartford Fire Insurance Co. v. Hagger, 5 Cir., 196 F.2d 270.
The contract does not u out ^ -t is only false swearingj misrepresentation, concealment or fraud which “ successful that avoids the policy, Nor “ there any reason why any such condition should be read into it. Clearly, “ tbe .absence of a statute,5 the law, which is founded on truth and justice, wl]I not re^ard as unsound that a perf_on has lost the benefit of the contract wllfu1’ «moral, dishonest acts which the contract ltself condemns.
Moreover, if the law out of some misgivings about forfeitures, were to require that the insurer demonstrate that it had been misled to its prejudice by the fraud, the policy provision would both be virtually worthless and put a premium on dishonest dealings by the assured, For if, by its own investigation, inspired perhaps by suspicions of the assured’s efforts to misrepresent, the insurer satisfied itself that a fraud had been attempted and declined to pay, such a rule would mean that the assured’s claim would then stand as though no dishonest acts whatsoever had been practiced. The mendacious assured, surveying the possibili*893ties and contemplating prospective tactics and strategy in the handling of his claim, would sense immediately that visa-vis himself and the underwriter, there would be no risk at all in his deceit. If it worked, he would have his money and, at worst, could be compelled to disgorge only by affirmative suit by the insurer if the fraud were discovered in time to be legally or practicably effective. If it didn’t work — if, before consummation, fraud was detected — he would suffer no disadvantage whatsoever. It would be an everything-to-win, nothing-to-lose proposition.
Additionally, such a rule would cast the underwriter in a role for which it is unsuited and in a process which the general good, out of long experience, considers best performed by government machinery. Convinced, as here by its own investigation of the claim, of dishonest acts by the assured, it would then have to undertake the talks of segregating truth from untruth, ferreting out the honest from the dishonest, choosing the right from amongst the wrong with all or much of the factual material coming from one now considered to be morally unreliable.
The public interest is not furthered by these likely consequences of reading into the contractual language this burden nowhere expressed. A judge-made policy which thus gives advantage to dishonesty will retard, not accelerate, the orderly adjustment of insurance losses. If the insurer, from the strong language of the contract interpreted in equally plain terms by the law, is entitled to assume that the assured is dealing honestly and fairly, asserting only that which in good faith is believed to be the substantial truth of the matter, the claim can be handled in a spirit and atmosphere of confidence. If, on the other hand, the insurer must realize that fraud is significant only if it is finally successful, that the slate is wiped clean if its own investigation uncovers the assured’s cozening, the setting may then become one of hostile antagonism, reluctance and apprehension forcing more, not less, litigation.
Courts have long recognized that, “The moral hazard is one of the main elements, if not the chief element, of an insurance risk, and it is never negligible. It is always material to the risk”, Connecticut Fire Ins. Co. v. Manning, 8 Cir., 160 F. 382, 385. It reflects the assumption that the relationship created by the contract is one requiring the utmost of honest, good faith dealing. Globe & Rutgers Fire Ins. Co. v. Stallard, 4 Cir., 68 F.2d 237, 240. This clause then is but means of demanding, at a critical time, moral uprightness and conduct of the kind basic to the genesis of' the undertaking.
This presents no danger that valuable rights will be lost by mere mistakes or errors in calculations, exaggerations in the amounts of the claims, or the assertion, even though doubtful, of coverage or other contentions as to all or particular items when these flow from the mistaken good faith judgment or opinion of the assured or his agents. Canners Exchange Subscribers at Warners Inter-Insurance Bureau v. North American Canning Co., 5 Cir., 194 F.2d 588, 589. For the courts will, as did the District Court here, make it positive that the insurer must satisfy the heavy burden of establishing that the conduct complained of was done and was a wilful, purposeful misrepresentation of facts having substantial materiality under circumstances to which the law would attribute the intention to defraud, Claflin v. Franklin Ins. Co., 110 U.S. 81, 3 S.Ct. 507, 28 L.Ed. 76, that is, cheat, deceive and cause the insurer to do other than that which would have been done had the truth been told.
Attesting, we think, to the fundamental justice of a position which exacts genuine compliance with an undertaking to be honest and truthful, is the fact that there is a scarcity of case law *894on this point. And what there is, rejecting,6 with the rarest exception,7 the contention that damage and prejudicial detriment must be shown, stems from timeless landmark cases such as Claflin v. Franklin Ins. Co., 1884, supra, and Virginia Fire & Marine Ins. Co. v. Vaughan, 1892, 88 Va. 832, 14 S.E. 754.
The charge was correct and, no other error being demonstrated,8 the judgment was right.
Affirmed.