What is considered concealment in insurance practices?

Concealment in insurance practices refers to the deliberate hiding of material facts by an applicant during the application process. This act is significant because insurance relies on a principle of utmost good faith, which means both the insurer and the insured must be honest and transparent about relevant information. When an applicant conceals material facts that could influence the underwriting decision or the terms of the policy, it undermines this principle and can lead to claims being denied or policies being canceled. The act of intentionally withholding crucial information is what differentiates concealment from other actions like an unintentional omission or misunderstanding of terms, both of which do not involve the intent to deceive.