General Lines Property and Casualty Insurance Practice Exam 2026 - Free Property and Casualty Insurance Practice Questions and Study Guide

The term that describes information that is not true but does not affect the insurer's decision to issue a policy is misrepresentation. In the context of insurance, misrepresentation refers to an incorrect statement or omission made by the applicant or insured regarding a material fact. However, if this incorrect information does not influence the insurer’s decision on whether to accept the risk or issue the policy, it is classified simply as a misrepresentation.

The focus here is on the nature of the misrepresentation and its potential impact on the insurer's decisions. While the other options, such as material misrepresentation or fraud, imply a more significant breach of trust or a deliberate intention to deceive, misrepresentation can occur without any intention to deceive, provided it does not affect the outcome of issuing the policy. Breach of warranty involves a violation of a specific contractual promise but is not classified simply based on the truthfulness of the information provided when it comes to issuing a policy.