What is the term for an insured making truthful statements on their application for insurance?

The term for an insured making truthful statements on their application for insurance is referred to as "consideration." In the context of insurance, consideration involves the values exchanged between the insurer and the insured. The insured provides truthful and accurate information on their application, which is essential for the insurer to assess risk and provide coverage accurately.

This truthful disclosure allows the insurer to determine the risk associated with insuring the applicant and to set appropriate premiums. If the insured misrepresents themselves during this process, it could lead to complications, such as denial of claims or cancellation of the policy.

Understanding consideration is fundamental in insurance contracts, as it emphasizes the importance of honesty and transparency in the application process, reflecting a mutual agreement where both parties provide something of value.