An insurance contract may be voided if a misrepresentation found on the application is determined to be what type?

The correct answer is material. A misrepresentation on an insurance application is considered material if it affects the insurer's decision to underwrite the policy or the terms of coverage. In other words, if the insurer had known the truth about the information provided, they might have altered their decision regarding the issuance of the policy, whether it be in terms of rates, coverage limits, or even the decision to insure at all.

For instance, if an applicant for health insurance states they have no pre-existing health conditions when they actually do, this omission is material because it directly impacts the risk assessment conducted by the insurer. If it is proven that the misrepresentation was material, the insurer has grounds to void the contract, leading to the cancellation of coverage and potentially denying any claims.

Other types of misrepresentations, such as conditional, refer to terms or clauses that depend on an event happening, and aleatory involves an exchange of unequal values, which do not directly relate to the insurer's decision-making process. Intentional misrepresentations, while serious and potentially leading to criminal charges, may be more focused on the intent behind the misstatement rather than its material impact on the insurer’s acceptance of risk. Thus, the concept of materiality is fundamental in determining the