What is the term for knowingly making a false statement on an insurance application?

The term for knowingly making a false statement on an insurance application is misrepresentation. Misrepresentation occurs when an individual provides inaccurate information with the intent to deceive or mislead, particularly in the context of securing insurance coverage. This can involve overstating facts, concealing important details, or outright lying about relevant circumstances.

In the field of insurance, misrepresentation can have serious consequences, including policy cancellation or denial of claims. Insurers rely on the accuracy of the information provided in applications to assess risk and determine appropriate coverage levels. Therefore, maintaining truthful and transparent communication is essential for both the insurer and the insured.

Understanding misrepresentation is critical for anyone involved in the insurance industry, as it plays a significant role in ethical practices and upholding regulatory standards. Other terms related to insurance, such as twisting (which refers to persuading a policyholder to lapse or surrender a policy for the purpose of purchasing another), sliding (the practice of adding unauthorized coverage to a policy without the client's knowledge), and rebating (the act of giving a portion of the commission back to the insured) are distinct practices that do not specifically pertain to making false statements on applications.