Okuzeka
Insurance vocabulary · Policies & Contracts

Utmost good faith

Meaning in insurance, with examples

phraseAdvanced term

In insurance, utmost good faith means: The principle that both sides of an insurance contract must be completely honest and share all important information with each other.

In Turkish: azami iyi niyet, azami iyi niyet ilkesi

How it is used

A basic principle taught in insurance courses, known in Latin as 'uberrimae fidei'. It explains why customers must disclose material facts and why insurers must explain the cover honestly.

Example sentences

  1. Insurance contracts are based on utmost good faith, so hiding previous claims can void the policy.

  2. The court said the insurer had also breached its duty of utmost good faith.

Common collocations

  • principle of utmost good faith
  • duty of utmost good faith
  • breach of utmost good faith
  • material factAny information that would affect an insurer's decision to accept a risk or the premium it charges, and that the customer must therefore disclose.
  • insurable interestA real financial interest in the person or property being insured, so that the policyholder would suffer a loss if something happened to it.
  • proposal formThe form a customer fills in when applying for insurance, giving the facts the insurer needs to assess the risk.
  • indemnityPayment that puts the insured back in the same financial position as before the loss, no better and no worse; also the principle behind such payment.

More terms: Policies & Contracts

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This page explains English vocabulary for learners. It is not financial advice.