Misrepresentation happens when incorrect, misleading, or incomplete information is given to an insurer when taking out, renewing, or updating an insurance policy.
This applies to all policyholders, including homeowners, landlords, commercial property owners, and business owners.
The information you provide helps insurers assess risk and calculate premiums. If any details are inaccurate – even unintentionally – it can affect whether your policy remains valid and how a claim is handled. In some cases, misrepresentation can lead to reduced claim payments or rejected claims.
Misrepresentation is generally grouped into three main types:
- Innocent – when you make a genuine mistake or were unaware the information was incorrect
- Negligent – when you fail to take reasonable care to check that the information is accurate
- Deliberate or reckless – when you knowingly provide false or incomplete information
Whether intentional or not, misrepresentation can have serious consequences during a claim, which is why it’s important to understand what it means and how to avoid it.
Examples of misrepresentation
Example 1: Incorrect rebuild cost
You estimate a property’s rebuild cost based on its market value rather than the actual cost to rebuild. This is common with commercial buildings, rental properties, and mixed-use premises, where rebuild costs can differ significantly from sale value.
If the property is underinsured as a result, this may be considered negligent misrepresentation – particularly if a professional valuation or recognised rebuild calculator was not used.
Example 2: Withholding previous claims
When arranging cover, you forget to declare previous property or business insurance claims, whether related to a private residence, a rental property, or a commercial premises.
If those claims would have affected the insurer’s view of the risk, they may reduce or reject a future claim on the grounds of misrepresentation.
Example 3: Undisclosed property changes or use
You carry out building works or make changes to how a property is used – such as an extension, internal alterations, tenant modifications, a change of use, or periods of unoccupancy – but fail to inform your insurer.
If a claim later arises (for example, following a fire or flood), the insurer may argue that the risk was misrepresented.
Misrepresentation vs non-disclosure: What’s the difference?
Although closely linked, misrepresentation and non-disclosure are not the same.
Misrepresentation occurs when incorrect or misleading information is given to the insurer – for example, stating an inaccurate rebuild cost or providing incorrect details about previous claims.
Non-disclosure occurs when relevant information is not provided at all – such as failing to mention major building works, a change in occupancy, business activity carried out at the property, or a relevant conviction.
In both cases, the result is the same: the insurer does not have a full or accurate understanding of the risk they are covering. This can lead to disputes, reduced claim settlements, or a voided policy if the information is considered material.
The key difference lies in how the information is wrong – misrepresentation involves inaccurate details, while non-disclosure involves missing details.
Why misrepresentation matters in a claim
When a claim is made, insurers will usually review the information provided when the policy was first taken out and at subsequent renewals.
If misrepresentation is identified, the insurer may:
- Adjust the settlement to reflect the correct level of risk
- Apply an additional premium that should have been charged
- Cancel or void the policy if the misrepresentation is considered deliberate or reckless
- Reject the claim entirely if the information significantly influenced their decision to provide cover
These outcomes can affect homeowners, landlords, and commercial policyholders alike.
How to avoid misrepresentation
You can reduce the risk of misrepresentation by taking a careful and transparent approach when arranging or renewing insurance:
- Read application and renewal documents carefully before submitting them
- Declare all relevant facts about the property, its use, and your insurance history
- Notify your insurer of any material changes, such as renovations, changes in occupancy, new tenants, or business use
- Use a broker or professional adviser if you are unsure what needs to be disclosed
If you are ever in doubt, it is generally safer to disclose information rather than withhold it. Insurers can only assess risk accurately when they have the full picture.
FAQs
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What if the misrepresentation was an accident?
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If the error was genuine and you took reasonable care to provide accurate details, it’s likely to be classed as innocent misrepresentation. In this case, your claim may still be paid, although your policy terms could be reviewed or adjusted.
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Can an insurer cancel my policy for misrepresentation?
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Yes. If the misrepresentation was negligent or deliberate, your insurer can cancel or void your policy. In serious cases, this means the policy is treated as if it never existed, leaving you without valid cover.
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Does misrepresentation apply to renewals?
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Yes. You are responsible for ensuring that all information remains accurate when your policy renews. If your circumstances have changed – for example, if you’ve carried out major building work or changed how you use the property – you must inform your insurer before renewal.
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What if I disagree with my insurer about misrepresentation?
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If your insurer accuses you of misrepresentation and you believe it’s unfair or incorrect, you have the right to challenge their decision. A Loss Assessor can review your case, gather supporting evidence, and handle communications with the insurer on your behalf. They can also help present your position clearly, for example, showing that any error was innocent rather than negligent, which can make a significant difference to the outcome of your claim.
