Defining ‘Material’ in the Context of Insurance Coverage

Anyone who has ever filled out an insurance application knows that the questions can be confusing and the whole process can be complicated. However, it is critical that individuals seeking a new insurance policy be thorough and disclose as much information as possible.

If any information is omitted or incorrect, an insurer can deny a claim, and courts will customarily side with the insurer. However, if the insurer’s application questions are unclear, the insured may be covered.

What Is ‘Material’?

According to Ontario’s Insurance Act, applicants must disclose all information that is “material” to the insurance they are seeking. If they fail to divulge a material fact, the insurer may void the policy. This means the insurer can proceed as if the policy was never in effect; however, when doing so, it must refund all premium fees paid.

To the courts, information is material if it would influence an insurer’s decision to grant insurance and thereby accept risk. For example, perhaps an art gallery owner applies for a policy to ship artwork by sea and states that the shipment will contain lithographs. However, the insured instead ships highly valuable oil paintings. Then the artwork is damaged due to a leak in the vessel, and the insured files a claim. The insurer may likely deny the claim and void the policy since it did not agree to indemnify something of such great value. Had the insurer known the value, that would have influenced the decision to offer the policy and warranted a higher premium cost.

Assessing the Insured’s Knowledge

When an insurer and insured enter an agreement, the courts assert they should do so in good faith. Both have obligations to the other. The insurer is obligated to ask clear and fair questions. The insured is obligated to answer them to the best of his or her knowledge.

In most cases, an insured knows of information is material. In the example of the oil paintings, the insured was aware of the artwork’s value and chose not to disclose it. Another example of material information might relate to fire insurance. Perhaps a homeowner applied for fire insurance for a home he occupied. But after receiving the policy, he rented the home out to another family. If he did not inform the insurer of this change to material information and there is a fire at the home, the policy claim would probably be denied. The insurer would note that policies for homeowners are different from policies for rentals and tenants.

However, there are times when a question can be ambiguous and the insured is lacking information. For instance, perhaps on a travel medical insurance application, the medical history section instructs the insured to disclose “any other symptom or disease not listed.” The insured does not list any conditions, goes on a trip to another country, and is hospitalized for a severe food allergy she did not know she had. Since she was unaware of the allergy and since the question was not specific, the insurer will likely be responsible for covering the hospital stay. The courts would agree if the insured had no symptoms and no medical record of the allergy.

In general, courts do not usually rule against insureds if they do not disclose information they would not have or that would require knowledge from a specialist (in the above example, such as a doctor). Insured are expected to provide facts that are reasonable for them to have.

As for insurers, they are expected to ask direct questions on their applications. If the questions are ambiguous or can result in a variety of answers or incomplete answers, the insurer may find itself having to cover policy claims for which it is not prepared.


When applying for any type of insurance, insureds must be thorough and truthful in answering all the questions presented to them. Likewise, insurers have an obligation to include straightforward questions on their applications. Many times, insureds will understand that information is material only if the insurer asks specific questions about it.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

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