Concealment
The intentional or unintentional withholding of a known material fact from the underwriting process. Intentional concealment of a material fact gives the insurer grounds to void the policy.
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Practice This Concept
Under California law, the defense of concealment available to an insurer applies when the insured:
Fails to disclose a material fact, whether the omission is intentional or unintentional — Concealment under California law (CIC Sections 330-339) is the neglect to communicate a fact known to the insured that is material to the risk. The concealment may be intentional or unintentional — negligent — and if the fact is material the insurer may rescind. The key point is that even an honest omission of a material fact can give the insurer a defense, because concealment does not require an intent to deceive.
CA-specific example
The doctrine of utmost good faith in an insurance contract requires:
Both the applicant and the insurer to deal honestly and disclose material facts — Insurance contracts are contracts of utmost good faith: both parties must act honestly. Because the insurer relies heavily on the applicant's statements of health, habits, and history, the applicant must disclose material facts truthfully; the insurer, in turn, must deal fairly and may not profit by concealing information from the applicant. This mutual obligation is the foundation of the concealment, representation, and warranty rules found in the California Insurance Code.
National insurance concept
- State RegulationsUnder California law, the defense of concealment available to an insurer applies when t…
- General InsuranceThe doctrine of utmost good faith in an insurance contract requires:
- State RegulationsUnder California Insurance Code Section 338, if an insured intentionally and fraudulent…
- General InsuranceA life policy terminates because the insured failed to pay the premium when due. This t…
- General InsuranceWhen an insurer rescinds an insurance policy, the legal effect is that:
- General InsuranceThe principle of utmost good faith in insurance requires:
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