What is the practice of withholding information from an insurer called?

The practice of withholding information from an insurer is called non-disclosure. Non-disclosure occurs when a policyholder fails to provide important information or facts that are relevant to the underwriting process, which would influence the insurer's decision to provide coverage or set premium rates. This omission can significantly impact the validity of the insurance contract because insurers rely on complete and accurate information to assess risks appropriately.

Non-disclosure may lead to policy cancellations or claims being denied if the insurer later discovers the omitted information. It is considered a serious issue because it undermines the principle of utmost good faith that governs insurance contracts, requiring both parties to act honestly and transparently.

In contrast, negligence refers to a failure to exercise reasonable care, while misrepresentation involves providing false information. Deception may imply a broader pattern of dishonest behavior, which might encompass but is not limited to non-disclosure. The specific term that accurately describes the act of withholding information is non-disclosure, making it the correct answer in this context.