What does misrepresentation in insurance typically refer to?

Misrepresentation in insurance specifically pertains to deliberate deception, which involves providing false or misleading information either intentionally or recklessly during the application process or when filing a claim. This can lead insurers to make decisions based on incorrect information, potentially impacting coverage, premiums, and claims processing. When an individual misrepresents facts, such as their health status, prior claims history, or other relevant details, it undermines the integrity of the insurance contract, as all parties rely on the truthfulness of the information provided.

The emphasis on intentional deception is crucial because if an applicant knowingly alters the truth for personal gain, it can result in serious consequences like policy cancellation, denial of claims, and even legal repercussions. Thus, understanding misrepresentation as a form of deceit is essential for grasping why accuracy and honesty are fundamental in the insurance industry.