What does a representation in a policy agreement signify?

A representation in a policy agreement is indicative of a belief that the applicant thinks is true. In the context of insurance, a representation is a statement made by the applicant regarding their personal circumstances or the state of the property being insured. This statement reflects the applicant's honest belief about the facts at the time the application is completed. It is important because insurance companies rely on these representations to assess risk and determine the terms of the policy.

For example, if an applicant states that they have never been treated for a certain medical condition, that representation would be considered a belief they hold to be true, even though it may later be discovered that the statement is not entirely accurate. Unlike a warranty, which is a definitive statement that must be demonstrably true, a representation is subject to the applicant's comprehension and honest assertion of the facts.

Therefore, the essence of a representation is that it represents the applicant’s belief at that moment, rather than a legally binding guarantee or a mere opinion that has no factual basis.