The term utmost good faith in insurance means?
-
both the insured and insurer must disclose all information
- only the insurer must disclose all information
- the beneficiary must disclose all information
- only the insured must disclose all information
The correct answer is: A
Explanation
Utmost good faith is a common law principle (sometimes called Uberrimae Fidei). The principle means that every person who enters into a contract of insurance has a legal obligation to act with utmost good faith towards the company offering theinsurance. It requires transacting parties to act honestly and not mislead or withhold critical information from one another.