What impact does intentional concealment of material facts have on an insurance policy?

Intentional concealment of material facts can void an insurance policy because it undermines the principle of utmost good faith, or "uberrimae fidei," that governs insurance contracts. When applying for an insurance policy, the applicant is obligated to disclose all material facts that could influence the insurer's decision to issue the policy or the terms under which it is issued.

Material facts are those that, if known, would affect the insurer’s assessment of risk. If an applicant intentionally conceals such information, the insurer may have grounds to cancel the policy. This means that if a claim arises, the insurer can refuse to pay out based on the premise that the policy was obtained under false pretenses. The duty to disclose material facts also serves to protect the integrity of the insurance system, ensuring fairness for both insurers and policyholders. As a result, concealment can have severe consequences, including the complete nullification of the policy, which is why this answer is correct.