Hawaii Insurance License Practice Exam

The term that describes an intentional misrepresentation of a material fact that leads someone to rely on that misrepresentation is fraud. Fraud involves deceitful practices with the intent to secure an unfair or unlawful gain, often resulting in harm or disadvantage to another party. In the context of insurance, fraud can take the form of lying about certain conditions to obtain a policy or benefits that would otherwise not be provided if the truth had been revealed. Fraud is a serious offense and can undermine the integrity of insurance contracts and trusts between parties.

Concealment refers to the act of intentionally hiding or omitting information that is crucial for the other party to know, but it does not necessarily involve the act of making an affirmative false statement. Negligence involves a failure to exercise reasonable care, which is different from intentional misrepresentation. Abandonment refers to willingly giving up rights or property, which does not align with the concept of misrepresentation or deceit. Understanding these distinctions clarifies why the term fraud is the correct answer in this context.