Question

A policy is issued for a premium of $500 per year, but a condition that would have caused the premium to be substantially more was misrepresented in the application. This information is deemed by the insurer to be:

a) Material
b) Non-material
c) Unimportant
d) Accidental

Answer 1

A misrepresented condition that would have caused a higher premium is considered material by the insurer.

Step-by-step explanation:

The subject of this question is Business at a High School level.

When a condition that would have caused the premium to be substantially higher is misrepresented in the application, it is deemed to be a material information by the insurer. In this case, the insurer considers the misrepresented information as important and relevant to pricing the policy.