What is a key characteristic of misrepresentation in insurance?

A key characteristic of misrepresentation in insurance is providing information that is wrongly stated or exaggerated. In the context of insurance, misrepresentation occurs when one party provides incorrect information that can influence the underwriter’s decision. This might involve over-stating facts, such as the value of an asset or the health status of an applicant, or providing outright false information. Such misrepresentation can lead to issues during claims handling or may result in the policy being voided altogether.

While other factors, such as submitting an incomplete proposal form or failing to disclose material information, can impact an insurance contract, they do not specifically encapsulate the concept of misrepresentation. Misrepresentation focuses on the accuracy and truthfulness of the information disclosed, rather than omissions or incomplete submissions. By understanding misrepresentation in this way, it becomes clear why it is essential for both parties in an insurance contract to ensure that all provided information is truthful and accurate.