P&CIllinoismedium
Under 215 ILCS 5/154, a misrepresentation made by an applicant on an Illinois insurance application will void coverage only if which of the following is true?
The misrepresentation was made with actual intent to deceive or materially affected acceptance of the risk or the hazard assumed
BThe misrepresentation was unintentional but inconvenient to the insurer
CThe misrepresentation related to any fact, regardless of materiality
DThe agent reported the discrepancy to underwriting
Why this is the answer
Section 154 of the Illinois Insurance Code sets a high bar for insurers seeking to rescind based on application misrepresentations. The insurer must prove either: (1) actual intent to deceive, or (2) a material effect on the acceptance of the risk or the hazard assumed. Mere inaccuracy or innocent misstatement is insufficient. Materiality is judged from the insurer's underwriting perspective at issuance — would the truthful answer have changed acceptance, rate, or terms? Illinois courts apply this standard strictly against insurers.
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