During policy renewal, what are policyholders obliged to disclose under common law?

Policyholders are obligated to disclose any changes to material circumstances during policy renewal based on common law principles related to the duty of disclosure. This duty requires policyholders to inform insurers of any significant alterations affecting the risk involved since the inception of the policy or during the previous policy term. Material circumstances are elements that could influence the insurer's decision to accept the risk, the terms of coverage, or the premium amount.

Thus, failing to disclose such changes can lead to consequences, including the potential for policy withdrawal by the insurer or denial of claims due to non-disclosure. It is critical for policyholders to be transparent about any developments that could affect the risk profile of their insurance coverage, ensuring that the insurer has a clear and current understanding of the insured's situation.

The other choices do not accurately reflect the obligations during policy renewal under common law. Simply renewing the policy with the same insurer or completing a new proposal form may not be necessary, nor is there an inherent obligation to increase the sum insured with inflation unless explicitly stated in the policy terms. These options do not align with the key legal requirement regarding material changes in risk status.