General Insurance PrinciplesQuestion 192 of 716
The doctrine that requires both the applicant and the insurer to deal honestly and disclose all material facts is known as:
a.Utmost good faith (uberrimae fidei)
b.The parol evidence rule of contract law
c.The rule of caveat emptor (buyer beware)
d.The doctrine of substantial performance
Explanation
Insurance contracts are made in utmost good faith (uberrimae fidei) because each party must rely on the other's honesty to evaluate a risk that only one party fully knows. The other choices are general contract doctrines that do not impose this heightened disclosure duty.
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Related questions on this topic
- Under California Insurance Code §330, neglect to communicate that which a party knows and ought to communicate is called:
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PrepPass team · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)