In what circumstance can an insurer deny a claim based on "material misrepresentation"?

The correct answer is that an insurer can deny a claim based on "material misrepresentation" if the insured provided false information that influenced the issuance of the policy. Material misrepresentation refers to situations where information provided by the insured is not only incorrect but also significant enough that it would have impacted the insurer's decision to extend coverage or the terms of that coverage. For example, if an applicant misrepresents their health status or previous claims history when applying for a life or auto insurance policy, and this misinformation leads to a different assessment of risk by the insurer, the insurer may justifiably deny a claim once the misrepresentation is discovered.

In contrast, failing to pay the premium does not constitute misrepresentation, as it pertains to the failure to meet policy obligations rather than providing false information. Similarly, being involved in a previous accident or changing an address does not automatically involve misrepresentation unless specific details were falsified during the application process that would have altered the insurer's view of the risk involved.