Test of Materiality

Section 46. The materiality of a representation is determined by the same rules as the materiality of a concealment.

What is the test of materiality?

The materiality of the representation is to be determined NOT by the event, but solely by the probable and reasonable influence of the facts upon the party to whom the representation is made, in forming his estimates of the disadvantages of the proposed contract or in making his inquiries.

Who determines materiality?

It is a judicial question.  It is NOT left to the insurance company to say after the loss has occurred that it would or would not have issued the policy had an answer been truly given.  The matter misrepresented must be of that character which the court can say would reasonably affect the insurer’s judgment.