Misrepresentation

A dressed-up term for an overt lie. This is a knowingly false statement made in the application and depended on by the underwriter to arrive at an underwriting decision. However, this term is not equivalent to a warranty. The root of this term is "Representation" meaning that the information is true to the best of the insured's knowledge; the information is not guaranteed - thus, it is not a warranty of accuracy (which implies absolute truth).

"To the best of the insured's knowledge" gives room for unintentional misrepresentation where a guarantee or warranty does not. As an example, the insured just purchased the building and was told by the seller that the roof was replaced 5 years ago. On the application, the insured represents that the roof is 5 years old. Following a loss, it is discovered during investigation that the roof was not replaced, it was merely cleaned and patched. The information was material and the insured did misrepresent the facts, however, he did not KNOWINGLY misrepresent them. The coverage will likely not be voided. However, had the policy required the insured to warranty (guarantee) the information in the application, the loss would not have been covered and the policy would have been voided even though the misinformation was not intentional.

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