What is meant by "representation" in insurance?

In the context of insurance, "representation" refers to a statement made by the insured that is believed to be true at the time it is made. This means that the individual providing the information honestly conveys their understanding or knowledge about a fact that is relevant to the insurance policy. It is important to note that representations do not have to be absolutely true in all circumstances; rather, they must be made in good faith and reflect the individual's belief at the time of the statement.

This concept distinguishes representation from warranties, which are promises that certain statements are true and must be honored. Because representations are based on belief and understanding, they provide a level of flexibility while still holding the insured accountable for their honesty when providing information necessary for assessing risk and determining coverage terms.

The other options would not be suited to define representation accurately. Some statements might be mandatory and require absolute truth, but that aligns more with warranties rather than representations. An optional disclosure does not align with the requirement of good faith or the belief attached to representations. A summary of policy benefits is not related to the truthfulness of statements made during the underwriting process but is rather a presentation of what coverage the policy provides.