How does an incomplete application impact the insurer's rights?

An incomplete application can significantly affect the insurer's rights regarding coverage and claims. When an application is submitted without all the required information, it indicates that the insurer has not been given a complete picture of the applicant's risks. However, if the insurer proceeds with the application, they typically cannot later refuse claims based solely on the unanswered questions or incomplete sections of the application.

This principle is grounded in good faith and fair dealing. If an insurer accepts an incomplete application and later tries to deny a claim by highlighting those omissions, they could be seen as acting in bad faith, especially if the missing information is not material to the risk. Thus, they must honor claims unless the unmet questions are critical to the underwriting decision or the applicant deliberately withheld truthful information.

In this context, the other options suggest scenarios where the insurer's rights are either heightened or altered in ways that do not align with standard insurance practices. The core idea remains that the insurer must operate within the boundaries of fair treatment towards applicants, especially concerning any incomplete information when claims arise.