In insurance terminology, what does concealment refer to?

Concealment in insurance terminology specifically refers to the failure to disclose a material fact that could influence the insurer's decision to issue a policy or determine its premium. This omission can affect the risk assessment and the contract terms. When an applicant does not reveal relevant information, such as pre-existing health conditions in health insurance or past claims in property insurance, it can lead to issues in the claim process or even policy cancellation due to the lack of full transparency.

This concept is crucial because it underscores the principle of utmost good faith required in insurance contracts, meaning that both parties are expected to act honestly and disclose pertinent information. By understanding concealment as the failure to reveal these critical facts, individuals involved in the insurance process can better grasp the importance of full disclosure when applying for insurance coverage.