What is the consequence for an agent who knowingly misrepresents policy terms?

When an agent knowingly misrepresents policy terms, they may face felony charges. This serious consequence underscores the legal obligations of insurance agents to provide accurate and truthful information regarding the policies they sell. Misrepresentation can significantly impact policyholders' decisions and their ability to file claims, leading to legal repercussions for the agent.

The severity of the punishment reflects the potential harm that can arise from misleading insurance practices. By facing felony charges, the legal system emphasizes the importance of ethical behavior and integrity in the insurance industry, ensuring that agents are held responsible for any dishonest actions that could result in financial loss or confusion for clients. It serves as a deterrent against such unethical practices, highlighting that agents must be diligent and honest in their communications about policy coverage and limitations.