In Barrera v. State Farm Mut. Automobile Ins. Co. (1969) 71 Cal.2d 659, the California Supreme Court held: "An automobile liability insurer must undertake a reasonable investigation of the insured's insurability within a reasonable period of time from the acceptance of the application and the issuance of the policy. This duty directly inures to the benefit of third persons injured by the insured. Such an injured party, who has obtained an unsatisfied judgment against the insured, may properly proceed against the insurer; the insurer cannot then successfully defend upon the ground of its own failure reasonably to investigate the application." (Barrera, supra, 71 Cal.2d at p. 663.) The Barrera court remanded the case for retrial to determine whether the insurer reasonably investigated the insured's insurability. (Ibid.) The California Supreme Court held: "An automobile liability insurer must undertake a reasonable investigation of the insured's insurability within a reasonable period of time from the acceptance of the application and the issuance of a policy. This duty directly inures to the benefit of third persons injured by the insured. Such an injured party, who has obtained an unsatisfied judgment against the insured, may properly proceed against the insurer; the insurer cannot then successfully defend upon the ground of its own failure reasonably to investigate the application." (Barrera, supra, 71 Cal.2d at p. 663.) The Barrera court remanded the case for retrial to determine whether the insurer reasonably investigated the insured's insurability. (Ibid.) Barrera was based on "public policy considerations that warranted an important qualification on an insurer's right to rescind in the context of automobile liability insurance." (Philadelphia Indemnity Ins. Co. v. Montes-Harris (2006) 40 Cal.4th 151.) Barrera prevents an insurance company from defeating recovery by an injured person who obtained a judgment from the insured. It does not, however, preclude the insurer from relying on misrepresentations by the insured. The insurer "retains a right to either prosecute a cause of action against the insured for damages for the latter's misrepresentations, or rely on the misrepresentations as a defense in any action by the insured." (Id. at p. 160.)