State RegulationsNC specificDifficulty 2/5
An applicant for a life policy delivered in Raleigh unintentionally misstates his height and weight on the application. Under North Carolina insurance law, what is the effect of that misstatement?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under G.S. 58-3-10, statements in an insurance application are representations, not warranties. A misstatement therefore does not void coverage by itself; the insurer must show the statement was fraudulent or material to the risk before the policy can be avoided. In practice, innocent errors about height and weight do not defeat a claim unless they materially affected the underwriting decision.
Why the other options are wrong
- A) Application statements are representations, not warranties, under North Carolina law, so a misstatement does not automatically void the policy.
- C) The statute does not require a premium refund while keeping coverage in force; the remedy depends on fraud or materiality, not automatic rerating.
- D) The fraud-or-materiality standard, not whether the statement was written, determines whether the policy is avoided.
Memory hook
NC speaks representations: no voiding without fraud or materiality.