What Does Representation Mean?
Representation refers to the act of disclosing important information either in written form or orally that will help the one being disclosed to form the proper course of action. In insurance, this information is crucial to the crafting of the policy by the insurer. Failure to disclose important information might nullify the insurance contract.
Insuranceopedia Explains Representation
When a person applies for insurance, he or she tells the representative of the insurance company facts about himself or herself or the property that he or she wants insured that will affect the price and the coverage of the policy.
A person with diabetes must inform the insurer so that the latter is informed of this health risk and can properly determine the proper policy for the potential insured.
A person who is insuring their car must tell pertinent facts like whether or not they’ve ever been arrested for drunken driving or that the car is sometimes used for racing.
In those cases, the insurance company can later deny coverage if those important information were undisclosed. Failure to represent the facts properly can nullify or void a policy.