Which type of statement may lead to the denial of a claim?

A material representation is a statement made by the policyholder that is significant enough to influence the insurer's decision on whether to issue a policy or how to assess the associated risk. If a policyholder provides a material representation that is either false or misleading, it can lead to the denial of a claim. This is because insurers rely on accurate information to assess risk; if they had known the truth, it may have changed their underwriting decision or premium pricing.

In contrast, immaterial representations refer to statements that do not significantly affect the risk assessment or underwriting process. Exaggerated claims may refer to claims that are inflated or not entirely accurate but do not necessarily lead to a denial unless they involve material misrepresentation. Unverifiable claims refer to information that cannot be substantiated, but simply being unverifiable does not automatically result in claim denial unless that information is essential to the claim's validity. Therefore, understanding the distinction between material and immaterial representations is crucial, as this directly impacts the potential for a claim denial.