What happens if a policyholder does not adhere to the policy's terms?

When a policyholder fails to adhere to the terms of their insurance policy, the insurer typically may deny a claim based on that non-compliance. Insurance policies contain specific obligations and conditions that policyholders must follow to ensure coverage. These can include timely reporting of claims, providing necessary documentation, or taking specific actions following a loss, such as preventing further damage.

If these conditions are not met, the insurance company can invoke a provision known as "material breach," which allows them to deny the claim. This principle is grounded in the legal notion that both parties must uphold their end of the contract for it to remain valid. Consequently, if a policyholder does not comply with their obligations as stipulated in the policy, it undermines the contract and can lead to a denial of the claim, as it demonstrates that the policyholder has not fulfilled their responsibilities.