Under which condition is an insurance contract typically voided?

An insurance contract can typically be voided due to non-disclosure of risk factors because when applying for coverage, the insured is required to provide accurate and complete information about their health and any risk factors that may affect their insurability. This duty is known as "utmost good faith." If an applicant willfully omits or fails to disclose relevant information—such as a pre-existing condition or significant health issues—this can lead to the insurer being misled about the risk they are insuring. In such cases, the insurer may consider the contract void from the beginning, as the contract was established based on false or incomplete information.

While failure to document health history could affect the underwriting process, it does not automatically void the contract unless that documentation is essential for determining risk and was deliberately omitted. Additionally, failing to pay premiums on time usually leads to a lapse in coverage rather than voiding the contract itself; however, the insurer may have recourse based on late payment policies. Declaring bankruptcy, although serious, does not inherently void existing insurance contracts but may affect financial responsibility in managing premium payments going forward.