Doctrine Of Utmost Good Faith

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Doctrine Of Utmost Good Faith The doctrine of utmost good faith, also known by its Latin name uberrimae fidei, is a minimum standard, legally obliging all parties entering a contract to act honestly and not mislead or withhold critical information from one another. This doctrine oblige both the insurer and the policyholder to act honestly toward each other. You should voluntarily disclose, accurately and fully, all relevant information to the risk being insured (for example, the car or the house being insured) whether requested or not. This principle is important to the insurer in it gives the insurer a full and accurate picture of the risk that is proposed to them. Insurance Contract being a financial contract needs to follow Utmost Good faith. Commercial contracts are subject to the principle of Caveat Emptor i.e. let the buyer beware. Hence it becomes very important for the policyholder to disclose all relevant information at the time of commencement of the policy so that they face difficulty making a claim in the happening of an eventuality. A failure by an insurer to handle claims with full and frank disclosure, clarity, candour and timeliness, or to appropriately respond to an insured's complaints, may be considered violations of the doctrine of good faith and may result in contracts being voided and sometimes even legal action. The five pillars of good faith are; respect for fundamental rights and freedoms, justice, fairness, law and order, reasonableness. I'm reality this principles work in an interesting ways to protect the policyholder and to keep the relationship of the two parties to the insurance contract on an even keel. #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

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