What is misrepresentation and what is the impact of misrepresentation?

This is a false, improper, incorrect or incomplete statement of a material fact, made on the application for the insurance policy. You are required to volunteer any information that might affect the acceptability, rate and therefore premium charged for the risk. This is known as utmost honesty.If you are not open and honest when completing your insurance contract there could be serious repercussions.

There is misrepresentation if a person applying for insurance lies when describing their situation or does not tell something they should have disclosed. This has to be something important that would have made the insurance company charge more or would have possibly refused the insurance. When the misrepresentation is found out then the existing insurance is declared null and void – as if it never existed.

You must declare that you have been refused insurance when you apply for coverage. If you have misrepresented yourself and been declined for this reason then you will find it more difficult to get insurance. This can result in less markets to choose from and higher rates.

The insurance answer is to be as accurate as possible when completing an application. If you do not understand a question then ask for an explanation.

Do post a question to our Forum on this site if you have concerns in this regard.