Material Misrepresentation
What Does Material Misrepresentation Mean?
Material misrepresentation, in the context of insurance, refers to a false statement made by the applicant when applying for a policy. It is considered “material” if the false statement would influence the insurer’s decision to accept or reject the application. Additionally, material misrepresentation constitutes a breach of contract and renders the insurance policy void from the outset.
Insuranceopedia Explains Material Misrepresentation
Material misrepresentation occurs when an applicant makes false statements or conceals facts with the intent to induce the insurer to issue an insurance policy. In many cases, even if the misrepresentation was unintentional, the insurer has the right to void the contract. The insurer may refund any paid premiums or, in cases of fraudulent intent, seize the premiums. However, in minor cases, the insurer may simply update the contract terms, including the premium, to reflect the new information.
