Arizona Surplus Lines Practice Exam 2025 - Free Surplus Lines Practice Questions and Study Guide

The term describing a modification made to an insurance application without the insured's knowledge is termed an "Altered Application." This acts as a significant ethical breach within the insurance industry since it implies that the information used to assess risk and set premiums does not accurately represent the insured's true circumstances or intentions. Such alterations can lead to misrepresentation, which might later impact claims and coverage validity.

In insurance practices, ensuring that the application reflects the true situation of the insured is vital. An altered application can fabricate information or misrepresent the insured's risk. This poses risks not only to the insurance company, which bases its decisions on inaccurate data but also to the insured, who may face denied claims if the insurer discovers the alterations.

Other options, while related to changes or inaccuracies in insurance applications, do not capture the essence of an unauthorized modification without the insured's knowledge as effectively as the term "Altered Application" does.