How does misrepresentation occur in insurance contracts?

Misrepresentation in insurance contracts arises when a person intentionally provides false information. This can occur at various stages of the insurance process, such as during the application for coverage where the applicant might knowingly omit critical facts or inflate certain details to influence the insurer’s decision. This misleading information can lead to insurance policies being issued under false pretenses, which can ultimately result in the denial of claims or cancellation of the policy if discovered.

In contrast, submitting valid claims, failing to file claims, or adhering to the terms of a contract do not constitute misrepresentation. Valid claims are based on factual representations and are part of the normal operation of an insurance policy. Failing to file claims does not imply any intent to deceive and does not involve misinformation. Adhering to the terms of a contract reflects compliance with the policy and does not involve any misrepresentation of facts.