A representation that is false but material has what potential impact?

• A. It could alter the underwriting decision of the insurer
• B. It could never affect the policy
• C. It guarantees policy issuance
• D. It automatically voids any claim

Answer: (A)

Material misrepresentation means giving false statements or omitting important facts that would change how a reasonable insurer views risk. Because this information affects risk evaluation, it can change the underwriting outcome—such as whether to issue the policy, what terms apply, or what premium is charged. If the misrepresentation is discovered, the insurer may rescind or cancel the policy or deny a claim, especially in cases of fraud, but these actions depend on the situation and aren’t automatic. The other options—saying it could never affect the policy, that it guarantees issuance, or that it automatically voids any claim—don’t fit because misrepresentation does have practical and potentially serious consequences for coverage and claims, though they’re not guaranteed or automatic in all cases.