Definition - What does Material Fact mean?
Material fact is information that is vital to interpreting a subject matter and is relevant to a legal document. In insurance, it is information that can determine the coverage and the cost of the premium. Withholding it might cause the policy to be null and void.
Insuranceopedia explains Material Fact
An insurance transaction works under the principle of utmost good faith. When someone wants to get a health insurance policy, for instance, they must reveal their health history so that the insurer can properly determine the coverage and the premium. If the person smokes tobacco, they must reveal that habit to the insurer or the representative of the insurance company to aid in the proper crafting of the policy. The smoking habit is a material fact because it exposes the insured to a number of health risks that the insurer will likely cover in the future.