Doctrine of Utmost Good Faith

The Doctrine of Utmost Good FaithThe doctrine of utmost good faith is a key principle in insurance contracts. This doctrine emphasizes the presence of mutual faith between the insured and the insurer. It doctrine includes:
Duty of Disclosure: You are legally obliged to reveal all information that would influence the insurer's decision to enter into the insurance contract.
Factors that increase the risks - previous losses and claims under other policies, insurance coverage that has been declined to you in the past, the existence of other insurance contracts, full facts and descriptions regarding the property or the event to be insured - must be disclosed. These facts are called material facts.Depending on these material facts, your insurer will decide whether to insure you as well as what premium to charge. For instance, in critical illness insurance, your smoking habit is an important material fact for the insurer. As a result, your insurance company may decide to charge a significantly higher premium as a result of your smoking habits.
Representations and Warranty: In most kinds of insurances, you have to sign a declaration at the end of the application form, which states that the given answers to the questions in the application form and other personal statements and questionnaires are true and complete.