Which statement is CORRECT about an insured's failure to report a claim in a timely manner based on the advice of an intermediary?

• A. It is a material misrepresentation
• B. It affects the insured's claim settlement
• C. It invalidates the claim
• D. It does not affect the insurance company's obligations

Answer: (D)

The main idea here is that prompt notice is a standard requirement, but if the insured’s delay in reporting came from following an intermediary’s advice, that delay does not by itself change the insurer’s legal obligations under the policy. The insured didn’t create a misrepresentation or knowingly hide a claim; they acted on guidance from someone who represents the insurer. Because of that, the contract remains in effect and the insurer remains obligated to handle a valid claim as it would have if notice had been prompt. The other statements imply the delay creates a misrepresentation, a settlement change, or a total invalidation, which isn’t the case solely because the delay followed the intermediary’s advice.