What is required for an insurer to refuse a claim based on misrepresentation?

An insurer is permitted to refuse a claim based on misrepresentation if the misrepresentation is considered material. A material misrepresentation is one that would influence an insurer's decision to accept the risk or set the terms of the policy. This means that if the information provided by the applicant was essential to the underwriting process and affected the insurer's assessment of risk, the insurer can deny the claim. The principle here is that insurers rely on accurate information to appropriately price and issue policies, and misrepresentation can undermine that foundation.

While intentional deceit or lying could be relevant in some contexts, it is not necessary for all cases of misrepresentation. Additionally, the misrepresentation does not have to concern the beneficiary specifically nor require a witness. The focus is primarily on the materiality of the misrepresentation in relation to the underwriting process and the overall risk assessment conducted by the insurer. Thus, the condition of materiality serves as the key criterion for denial of a claim due to misrepresentation.