PRINCIPLE OF UBERRIMAE FIDEI (UTMOST GOOD FAITH) :
• Both the parties i.e. the insured and the insurer should have a good faith towards each other.
• The insurer must provide the insured complete, correct and clear information of subject matter.
• The insurer must provide the insured complete, correct and clear information regarding terms and conditions of the contract.
• This principle is applicable to all contracts of insurance i.e. life, fire and marine insurance.
Principle of Uberrimae fidei (a Latin phrase), or in simple English words, the Principle of Utmost Good Faith, is a very basic and first primary principle of insurance. According to this principle, the insurance contract must be signed by both parties (i.e insurer and insured) in an absolute good faith or belief or trust.
The person getting insured must willingly disclose and surrender to the insurer his complete true information regarding the subject matter of insurance. The insurer’s liability gets void (i.e legally revoked or cancelled) if any facts, about the subject matter of insurance are either omitted, hidden, falsified or presented in a wrong manner by the insured.
The principle of Uberrimae fidei applies to all types of insurance contracts.