What must occur for recovery to be prevented under an insurance policy in the case of misrepresentation?

For recovery to be prevented under an insurance policy due to misrepresentation, it is essential that the misrepresentation is both fraudulent and material to the acceptance of risk. This means that the false statement must not only be intentional or deceitful—aimed at inducing the insurer to enter into the contract—but also significant enough that, had the truth been known, the insurer would have altered its decision regarding coverage or the terms of the policy.

Fraudulent misrepresentation involves a deliberate attempt to deceive, while materiality refers to the importance of the misrepresented fact in the context of the risk being assessed. For example, if an applicant lies about their prior claims history or the condition of the property to be insured, the insurer might deem these facts material because they directly impact the risk evaluation and potential payouts.

The other options do not fully capture the legal requirements necessary for an insurance policy to be voided due to misrepresentation. Minor inaccuracies may not affect coverage. Not all misrepresentations lead automatically to loss of coverage; some may be seen as immaterial, while a previous claims history is not a prerequisite for determining the impact of misrepresentation in general. Thus, the focus on both fraudulent and material aspects is crucial in understanding how misrepresentation can invalidate a policy