What is a common consequence of misrepresentation when applying for insurance?

Misrepresentation when applying for insurance can lead to policy cancellation because insurers rely heavily on the accuracy and truthfulness of the information provided by the applicant. When an applicant makes false statements or omits important facts, the insurer may view this as a breach of the trust necessary for the insurance contract to be valid. If the insurer discovers misrepresentation, they may decide that they would not have issued the policy had they known the true information. Consequently, the insurer has the right to cancel the policy to protect themselves from potential losses based on incorrect or misleading information. This underlines the importance of providing complete and honest information during the application process to maintain the integrity of the insurance agreement.