What can be a consequence of misrepresenting material facts on an insurance application?

Misrepresenting material facts on an insurance application can lead to serious consequences, including the denial of claims or the potential voiding of the policy altogether. Insurance contracts are based on the principle of utmost good faith (uberrimae fidei), meaning both the insurer and the insured are expected to provide accurate information. When an applicant provides false or misleading information about material facts—those that would influence the insurer's decision to underwrite the policy or determine the premiums—the insurer may consider this a breach of trust.

If a misrepresentation is discovered after a loss occurs, the insurer has the right to investigate the application and the circumstances surrounding the claim. If it is determined that the misrepresentation is significant enough to affect the underwriting process, the insurer can deny coverage for the claim or cancel the policy entirely, arguing that they would not have offered coverage had the true information been provided upfront. This underscores the importance of accuracy in the application process, as it directly impacts the validity of the insurance contract.