What term refers to the act of withholding material facts from an insurer?

• A. Concealment
• B. Misrepresentation
• C. Fraud
• D. Omission

Answer: (A)

The term that refers to the act of withholding material facts from an insurer is concealment. In the context of insurance, concealment occurs when an insured party fails to disclose important information that could influence the insurer's decision to provide coverage or determine the terms of a policy. Such material facts might include prior claims, existing health conditions, or other risks that the insurer needs to be aware of in order to accurately assess the risk involved.

Concealment is particularly significant because it can affect the validity of an insurance contract. If an insurer discovers that a policyholder has purposely withheld crucial information, it may lead to a denial of coverage or cancellation of the policy. Understanding this term is essential for both insurers and insured individuals, as it underscores the importance of transparency in the insurance process.

Other terms, while related, encompass different aspects. Misrepresentation involves providing false information rather than simply withholding it. Fraud typically implies intent to deceive for personal gain and can include both concealment and misrepresentation. Omission refers more broadly to leaving out information but does not carry the same specific implications as concealment in the insurance field.