Which is a consequence of Statutory Condition No. 1 regarding Misrepresentation?

Statutory Condition No. 1 regarding Misrepresentation emphasizes the significance of truthful representation in insurance contracts. When a party provides information to the insurer, misrepresentation occurs if the information conveyed is false or misleading. The consequence of such misrepresentation is that it can lead to policy cancellation. If the insurer discovers that the insured has provided inaccurate information that significantly affects the risk assessment, they may choose to void the policy. This means that the insurer is no longer bound by the contract, as they rely on the accuracy of the information provided to underwrite the policy effectively.

This aspect of Misrepresentation is critical because it reinforces the obligation of the insured to provide honest and complete information. It ensures that both parties maintain trust and good faith throughout the insurance process, aligning with the overall principles of insurance where accurate disclosure is crucial for risk assessment and premium determination.

The other options, while related to the topic, do not encapsulate the primary consequence outlined in the statutory condition. For example, stating that "All information given must be accurate" describes a general expectation but does not specify the consequences of misrepresentation. Similarly, the notion that "only statements made knowingly are misrepresentations" limits the scope of misrepresentation and overlooks instances of negligence or careless misrepresentation