Which of the following is true regarding material misrepresentations?

Material misrepresentations are statements made by an applicant for insurance that are false and significant enough to affect the underwriting or the decision to issue a policy. When a misrepresentation is deemed material, it can lead to significant consequences because it can affect the insurer's ability to evaluate the risk associated with providing coverage.

The correct assertion about material misrepresentations is that they can result in fraudulent claims if intentional. This means that if an insured knowingly provides false information with the intent to deceive the insurer, this action can be classified as fraud. An example could be an applicant overstating their medical history to obtain a policy under more favorable terms than they would otherwise qualify for. If a claim arises and the insurer discovers the intentional misrepresentation, they may not pay the claim or could even void the policy altogether, reinforcing the serious implications of such actions.

In contrast, the other options do not accurately reflect the nature of material misrepresentations. While some can affect the outcome or validity of a policy, they do not universally benefit one party over another; rather, they introduce potential risks that have to be assessed. The requirement for documentation by the insured is also not strictly necessary, as misrepresentations are typically evaluated based on the information provided during the application process itself