What term describes a scenario where the insured fails to provide relevant facts while applying for insurance?

Concealment refers to the act of hiding or not disclosing relevant information that is pertinent to an insurance policy during the application process. In the context of insurance, this term specifically applies when an applicant deliberately fails to provide significant information that could affect the underwriting decision made by the insurer. It emphasizes the responsibility of the insured to disclose material facts.

In insurance, the principle of utmost good faith requires both parties—the insurer and the insured—to act honestly and not withhold relevant information. When an insured conceals information, they breach this principle and may result in the denial of a claim or cancellation of the policy.

Understanding concealment is crucial for both agents and insureds to maintain compliance with their obligations to disclose information accurately. Unlike misrepresentation, which involves providing false information, concealment directly relates to the failure to disclose truthful yet relevant facts. Informed disclosure helps ensure that all parties understand the risks and conditions associated with the insurance coverage being sought.