What usually happens if an insurance application has misleading information?

When an insurance application contains misleading information, the insurer has the right to take significant actions regarding the policy. The presence of misleading or false information can indicate a lack of honesty or good faith on the part of the applicant. As a result, the insurer may view this as a material misrepresentation, which could lead them to cancel the policy altogether or deny any claims that arise as a result of that misleading information. Insurers rely on the accuracy of the information provided in order to assess risk appropriately and determine coverage levels. When the provided information is found to be untruthful, it compromises the foundation of the insurance contract, allowing the insurer to act in accordance with their policies and state regulations, which often permit cancellation or denial of claims under such circumstances.