What might happen if a homeowner fails to disclose relevant information to the insurer?

When a homeowner fails to disclose relevant information to the insurer, claims could indeed be denied due to non-disclosure. Insurance relies heavily on the principle of utmost good faith, also known as "uberrima fides," which requires both parties to act honestly and not withhold information that could influence the terms of the policy or the underwriting decision.

If a homeowner omits crucial details—like previous claims, pre-existing damages, or even changes in use of the property—this can significantly affect the insurer's risk assessment. In the event of a claim, the insurer may find that the undisclosed information alters the situation fundamentally. As a consequence, the insurer may decide to deny the claim because they were not given a full picture of the risk they were agreeing to cover.

This principle is important to maintain fairness in the insurance system, ensuring that insured parties are fully compliant and transparent, which, in turn, allows insurers to properly evaluate risk and set adequate premiums. The other potential outcomes, such as a valid policy despite non-disclosure or a decrease in premiums, are not in line with how insurance operates within this framework of trust and transparency. Similarly, suggesting that there would be no consequences does not accurately reflect the contractually binding nature of disclosures in insurance