What is a consequence of failing to disclose relevant information in an insurance application?

Failing to disclose relevant information in an insurance application can lead to the policy being voided. This is primarily because insurance operates on the principle of utmost good faith, which obligates the applicant to provide all material information that could affect the insurer's decision to underwrite the policy. When an applicant withholds or misrepresents information, it can significantly alter the risk assessment performed by the insurer. If the insurer discovers this lack of disclosure, they may choose to void the policy entirely, meaning that they are released from any obligations under the contract. This consequence underscores the importance of honesty and transparency when applying for insurance, as it directly impacts the validity of the coverage provided.

In contrast, the other options do not accurately reflect the implications of nondisclosure. For instance, insurers typically do not cover all risks without having a complete and truthful application, and failing to disclose relevant information is unlikely to expedite claim processing. Moreover, there are generally serious ramifications for failing to disclose, even if a claim appears valid, as nondisclosure can lead the insurer to deny coverage altogether.