What is the outcome for an insurer when a proposal form is completed with partial information by the insured?

When a proposal form is completed with partial information by the insured, the correct outcome for the insurer is that they are deemed to have waived their rights regarding the missing information. This is based on the principle of utmost good faith (uberrimae fidei) that governs insurance contracts. Insurers expect full disclosure of material facts from the insured, and if an insurer accepts a proposal form with incomplete information, they may be viewed as having accepted the risk associated with that omission.

In practice, if the insurer does not take action to address the missing information at the time the proposal is submitted, it can imply that they are willing to proceed without that detail. This means they could forfeit the right to challenge a claim later on the basis that the insured failed to provide specific information at the outset.

The other options suggest outcomes that imply a stricter interpretation of the contract terms, such as nullification of the policy or breach of contract, which are not necessarily automatic results in the context of incomplete disclosures provided that the insurer did not request the missing information or take issue with it. Such interpretations could neglect the practical aspects of how insurers operate with respect to disclosure and risk assessment.