What insurance principle is violated if an insurer neglects to pay a legitimate claim?

The situation described in which an insurer neglects to pay a legitimate claim primarily relates to the principle of good faith. This principle establishes that both the insurer and the insured have a mutual obligation to deal fairly and honestly with one another. When an insurer fails to honor a legitimate claim, it violates this principle of good faith, leading to a breach of trust in the insurance agreement and potentially causing harm to the policyholder.

In the context of property insurance, good faith entails the insurer's responsibility to process claims sincerely and without unfairly denying them. If a claim is legitimate, the expectation is that the insurer will fulfill its contractual obligation and provide the necessary payment to the insured. A violation of this principle can result in the insurer facing legal consequences and a loss of reputation.

The other options, while relevant to insurance principles, do not directly apply to the insurer's obligation regarding claims processing in this scenario. Adhesion relates to the consumer having little choice in contract terms, consideration refers to something of value exchanged in a contract, and representation involves the statements made by the insured when applying for insurance. Understanding these distinctions is important for grasping the broader context of insurance principles.