What is the term for a significant failure to disclose information that impacts an insurance policy?

Concealment refers to a significant failure to disclose material information that is relevant to an insurance policy. In the context of insurance, it is the act of intentionally not revealing facts that could influence an underwriter's decision regarding coverage or premium rates. This can lead to issues such as denial of a claim or cancellation of the policy, because the insurer relies on the full disclosure of information when determining the risk and potential liabilities associated with the policy.

Understanding concealment is critical in the insurance industry because it embodies the principle of utmost good faith, which requires both parties in an insurance contract to act honestly and disclose all relevant information. When a party consciously withholds information that is essential for making informed insurance decisions, it creates a situation where the insurer could find themselves misled about the risk they are taking on.

Recognizing this distinction is key for adjusters, as they must navigate the complexities of claims and policy interpretations where disclosure of material information is concerned.