What term describes the misstatement of facts by either party in an insurance contract?

The term that describes the misstatement of facts by either party in an insurance contract is misrepresentation. Misrepresentation occurs when one party presents information that is not true or fails to disclose relevant information, leading the other party to make decisions based on that inaccurate information. In the context of insurance contracts, misrepresentation can influence the terms of coverage, premiums, and the underwriting process.

For example, if an applicant fails to disclose a pre-existing condition when applying for insurance, this constitutes misrepresentation, as it affects the insurer's evaluation of risk and could impact claim outcomes.

Other terms present in the options relate to different concepts. "Knocking" is not a recognized term in the context of insurance contracts. "Overloading" typically refers to exceeding specified limits, often in insurance coverage, rather than misstatements. "Twisting" describes a practice where an agent persuades a policyholder to replace an existing policy with a new one, often misleadingly; however, it does not encompass general misstatements of facts like misrepresentation does.