Computer Science, asked by cluccullco, 1 year ago

What is the Principle of the Utmost Good Faith?

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Answers

Answered by Divyaalia
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Hey mate, here is your answer -:)

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It refers that no material or important facts should be concealed by both the parties to the insurance contract.

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Answered by Anonymous
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HEYAA!!
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The principle of Utmost Good Faith is also known as Uberrimae Fides. It means that both the policyholder and the insurer need to disclose all material and relevant information to each other before commencement of the contract.

Under Section 45 of Insurance Act 1938 states that if within 2 years of commencement or revival of the insurance policy, the insurer get to know that there has been a non-disclosure or misrepresentation of material facts, then the insurer can call the policy null and void.

It simply means that if within 2 years the Insurance Company finds out that the policy holder has not stated the complete truth or has lied while filling up the proposal form, then it can cancel the policy and decline the claim. It is not necessary that they will definitely repudiate the claim, but it is also a possibility. The insurer may ask for the difference in premium or change the terms and conditions after the fact has been disclosed.

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