What term describes the failure to disclose a known material fact on an application?

What term describes the failure to disclose a known material fact on an application?

• A. Concealment
• B. Fraud
• C. Misrepresentation
• D. Non-disclosure

Answer: (A)

Concealment is intentionally withholding a known material fact when applying for a policy. In property and casualty insurance, a fact is material if knowing it could influence the underwriter’s decision to issue the policy or set the premium. If you know something that would affect coverage—like a prior claim, a hazardous activity, or a serious health or risk factor—and you don’t disclose it, that withholding is concealment. This can let the insurer void the contract or deny a claim because the application was completed with incomplete information. This differs from misrepresentation, which involves making a false statement or presenting information in a deceptive way, and from fraud, which is a deliberate act to deceive for an improper gain. Non-disclosure is simply failing to reveal information, which can overlap with concealment when the fact is known, but concealment specifically emphasizes knowingly withholding.

Concealment is intentionally withholding a known material fact when applying for a policy. In property and casualty insurance, a fact is material if knowing it could influence the underwriter’s decision to issue the policy or set the premium. If you know something that would affect coverage—like a prior claim, a hazardous activity, or a serious health or risk factor—and you don’t disclose it, that withholding is concealment. This can let the insurer void the contract or deny a claim because the application was completed with incomplete information.

This differs from misrepresentation, which involves making a false statement or presenting information in a deceptive way, and from fraud, which is a deliberate act to deceive for an improper gain. Non-disclosure is simply failing to reveal information, which can overlap with concealment when the fact is known, but concealment specifically emphasizes knowingly withholding.