When is a misrepresentation on an insurance application considered fraud?

A misrepresentation on an insurance application is considered fraud when it is intentional and material. This means that the applicant knowingly provides false information that is significant enough to influence the insurer's decision to provide coverage or set premiums. Intentional misrepresentation signifies that the individual had the intent to deceive the insurer, which distinguishes it from errors or unintentional misstatements. The material aspect relates to the importance of the misrepresented fact; if the insurer knew the truth, it might have acted differently, such as issuing a policy or setting a different price.

In contrast, unintentional or negligible misrepresentations, accidental inaccuracies, and disclosures during the underwriting process do not usually rise to the level of fraud. Such instances are often viewed as mistakes or omissions rather than deliberate attempts to mislead. Therefore, the specific combination of being intentional and materially affecting the insurance process defines fraud in this context.