What is it called when the insured fails to reveal a known fact that affects the policy?

The situation where the insured fails to disclose a known fact that could impact the insurance policy is referred to as concealment. This term indicates that there is an active withholding of information that could affect the insurer's decision to provide coverage or the terms thereof. In the context of insurance, concealment can lead to significant ramifications, including the denial of claims or cancellation of the policy, as it undermines the principle of utmost good faith that governs the insurance contract.

Understanding concealment is essential because it highlights the responsibilities of the insured to provide complete and accurate information to the insurer. It is a critical concept in insurance law where the insurer relies on the disclosures of the insured in evaluating risk and determining premium rates. This failure to disclose can occur either knowingly or from negligence, but the key aspect is that the insured has not revealed facts that are material to the underwriting process or the coverage agreement.

In contrast, the other terms represent different concepts in insurance. For instance, waiver pertains to the voluntary relinquishment of a known right, while warranty implies a promise made by the insured regarding certain conditions of the policy. Misrepresentation involves providing false information or altering the truth, rather than simply failing to disclose it. Understanding these distinctions helps to grasp the broader implications of insured and