Which action would qualify as concealment or fraud under a homeowners policy?

• A. Fails to disclose prior criminal records.
• B. Falsely reports a different residence address.
• C. Fails to disclose that he manufactures methamphetamines in the basement.
• D. Fails to renew the policy on time.

Answer: (C)

Concealment or fraud means intentionally hiding or misrepresenting a fact that would change the insurer’s view of the risk or the policy terms. The action of not disclosing that he manufactures methamphetamine in the basement fits this perfectly because it’s an illegal, high-risk activity that directly affects the level of risk the insurer is insuring. It’s a clear, material fact about how the home is used and the dangers present, and choosing to hide it shows an intent to deceive the insurer, which is the essence of concealment or fraud.

The other scenarios involve misrepresentation or issues with the policy that don’t inherently illustrate concealing a dangerous risk: omitting prior criminal records could be a misrepresentation but isn’t as directly tied to the insured risk in the home, falsely reporting a different address is a misrepresentation but not about the risk the policy is underwriting, and failing to renew on time results in a lapse rather than concealment of a material fact.