The rejection of insurance claims due to misrepresentation creates tension between the principle of utmost good faith and the need for consumer protection, especially after the Constitutional Court Decision Number 83/PUU-XXII/2024 changed the construction of Article 251 of the Criminal Code. This study aims to analyze the limits of the application of misrepresentation as a basis for rejecting claims and formulate a balance between the insured's disclosure obligation and consumer protection. The research uses normative legal methods with legislative, case, conceptual, and analytical approaches to insurance regulations, consumer protection regulations, and relevant court decisions. Research has found that misrepresentation cannot automatically erase the rights of the insured. The legitimacy of a claim rejection must be tested through five parameters: materiality, knowledge and intention, causation, proportionality, and procedural fairness. Utmost good faith should be understood as a bilateral principle that binds the insurer and the insured, while the Constitutional Court Decision strengthens the restriction on unilateral cancellation of coverage. More operational regulatory guidelines on materiality, proof, and claim rejection procedures are needed to realize proportionate consumer protection without compromising the insurer's ability to handle fraud.
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