Insurance which protect you in case unforeseen event in exchange for it insurance company charges you insurance premium. Insurance company who determines insurance premium on the basis of answers you disclose on your insurance application. 

Whenever insured applies for insurance, he has the advantage, since he has full knowledge of all necessary facts needed by insurer, and which insurance company doesn’t aware of. Whatever you have disclose that will determine if company offer you a policy, including correct premium to charge you in relation to risk you carry.

In case you hid the material facts from insurance company and your insurance company discovers you purposely hid the material facts from insurance company on your insurance application, then you can expect to face consequences such as: 

If you hid the material fact on your application is considered as ‘non-disclosure’ or ‘misrepresentation’ If insurance company finds that insured did not disclose material facts, insurance company may void insurance contract, and policy will be cancelled from inception. 

Whenever insurance company cancels your policy it stays on record for certain years. Because of this reason insurer may not provide insurance protection and if provides then it will be by paying extra premium. 

In case you have reported a claim to insurance company and through the post claim underwriting insurance company discovers you intentionally hidden material facts that would have affected insures decision to issue policy, then your claim will denied and your policy will be cancelled. 

Sometimes insured hid the material fact unintentionally. In case of innocent non-disclosure insurance company may not cancel the policy. Genuine example like person uses vehicle to deliver milk or pizza.  

Insurance contract is based on the principle called ‘uberrimae fidae’ that is ‘utmost good faith’, under which insured must disclose to insurer any matter that may possibly affect risk of loss. 

Therefore it is important whenever you apply for insurance always provide accurate and up to date material facts to insurance company. Be honest with your insurance company which will prevent potential consequences.   

Know more about latest insurance policies in India.