What principle is violated if an insured provides misleading information during the application process?

The principle that is violated when an insured provides misleading information during the application process is the principle of utmost good faith. This principle, also known as "uberrima fides," requires both parties in an insurance contract—the insurer and the insured—to act honestly and provide all relevant information to each other. The idea is that the insurer relies on the accuracy and completeness of the information provided by the insured to assess risk and determine the terms of the policy.

When an insured gives misleading information, it undermines this foundational trust and could lead to the insurer making decisions based on incorrect assumptions. This lack of transparency can affect the underwriting process, the calculation of premiums, and ultimately the validity of the insurance contract itself.

By adhering to the principle of utmost good faith, both parties can ensure a fair and equitable relationship. If this principle is breached, the insurer may have grounds to void the policy or deny claims, as they were not provided with accurate information needed to evaluate the risk accurately.