General Insurance PrinciplesPregunta 178 de 474
An applicant knows the basement floods each spring and stays silent although the application asks about past water damage. This is:
a.a breach of warranty that merely reduces the sum the insurer pays
b.an innocent misstatement that the insurer is expected to correct
c.a morale hazard the underwriter is expected to discover
d.concealment of a material fact, which can void the coverage
Explicación
Concealment is the deliberate withholding of a material fact the insurer needed to evaluate or price the risk, and a concealed fact of this size can let the insurer void the policy. The innocent-misstatement answer fails on the facts, because the applicant knew about the flooding and was directly asked. Recurring flooding is a physical condition of the property, not an attitude of indifference.
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