What is considered a "Material Fact" in insurance?

A "Material Fact" in insurance is defined as a fact that affects the insurer's decision to provide coverage or the terms of that coverage. This is crucial because insurers rely on accurate and honest information to assess risk and determine pricing. If a policyholder fails to disclose a material fact, this could lead to complications, including denial of claims or cancellation of the policy, as the insurer's underwriting process is based on the assumption that all pertinent information has been shared.

In contrast, minor details that do not impact the coverage decision or information collected after a claim is filed do not meet the threshold for being considered material. Additionally, promotional statistics about the insurer are marketed information and do not pertain to the individual risk profile necessary for making underwriting decisions. These distinctions are essential for both insurers and insured parties to understand the importance of full and honest disclosure in the insurance process.