What does concealment refer to in insurance terms?

Concealment in insurance refers specifically to the failure to disclose a known fact that is material to the risk being insured. This means that when a policyholder has pertinent information that could influence the insurer’s decision to provide coverage or determine the premium, they are obligated to disclose this information fully.

Failure to disclose such information can potentially affect the insurer's ability to assess risk accurately and may lead to disputes regarding claims or even policy cancellation. For example, if an applicant for insurance knows about a pre-existing condition that could affect their health insurance, but chooses not to disclose it, that would be considered concealment.

Understanding this aspect of insurance is critical, as it underscores the trust and transparency required in the insurance process. Concealment is distinct from other forms of misrepresentation, such as providing false information or incomplete applications, which involve intentional deception or omission that goes beyond simply failing to disclose a known fact.