What is a common consequence of misrepresenting information on an insurance application?

Misrepresenting information on an insurance application can lead to policy cancellation because insurers rely on the accuracy of the information provided to assess risk and determine coverage terms. If an applicant fails to disclose critical information or provides false details, the insurer may see this as a breach of trust and a reason to nullify the contract. Insurance companies have a legal right to cancel policies based on misrepresentation, as it compromises their ability to underwrite risks accurately.

Other outcomes, such as claim approval, increased premiums, or automatic renewal, are generally not direct consequences of misrepresentation. Instead, claims may be denied or altered upon discovering misleading information, and premiums may not necessarily increase if a policy is canceled. Automatic renewal provisions typically do not apply in cases of misrepresentation, as the insurer must assess the validity of the information before renewing any policy.