What constitutes a “material misrepresentation” in insurance applications?

A material misrepresentation in insurance applications occurs when a false statement is made that significantly impacts the insurer's decision to provide coverage. This means that if the insurer had known the truth, it might have altered its assessment of the risk involved or determined that the applicant was ineligible for coverage. The key aspect of a material misrepresentation is its influence on the underwriting process, where the insurer relies on accurate information to evaluate the risk they are taking on. In this context, a minor error or clerical mistake does not generally affect the insurer's decision-making process, and omitting non-essential facts does not rise to the level of material misrepresentation, as it is the significance of the information that dictates its materiality.