Material Fact

Falsification of a material fact in such a manner that, had the insurance company known the truth, it would not have insured the risk. Amaterial misrepresentation gives an insurance company grounds to rescind a contract.
See also concealment.

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A fact that is germane to a particular situation; one that participants in the situation such as a trial, may reasonably be expected to consider.


Example: If material facts about the investment property lying in a floodplain had been communicated to the buyer, he would not have bought. He is now charging misrepresentation against the seller and the broker.

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