Misrepresentation

What Does Misrepresentation Mean?

Misrepresentation, in the context of insurance, refers to the act of providing false information during an interview or on an application for a policy. This misrepresentation may be minor enough that the insurer only needs to update the policy, or it may be significant enough to provide valid grounds for voiding the contract.

Insuranceopedia Explains Misrepresentation

For example, an erroneous statement regarding the length of previous coverage, such as stating it was 10 years instead of 11, would likely lead to the insurer updating and adjusting the contract as necessary. In contrast, concealing a major illness could result in the contract being voided.

Misrepresentation may be unintentional, but if it is material—meaning it is significant enough to influence the insurer’s decision to provide coverage or include specific terms—the insurer may void the contract. However, in some cases of material misrepresentation, the insurer may still consider the policy valid. Since the information an insurer requests is meant to assess the level of risk a potential policyholder presents, any misrepresentation on an insurance application may be presumed material, as it could ultimately affect the insurer’s decision to provide coverage and under what terms.