Page 55 - Ebook IC S01

Survey And Loss Assessment IC-S01

If it is proved that the insured has not declared some material fact the insurer has

the right to declare the policy as void and forfeit all the premiums paid. However this

right can be exercised by the insurer is within first two years of the policy. After two

years this right can be exercised provided the insurer can prove the element of fraud

in it. (section 45 of the insurance Act 1938)

When can nondisclosure be alleged

Fact must be known to proposer

Fact must not have been known to insurer

Fact if made known to the insurer, may have affected the decision of the insurer

to grant cover

The fact must have been deliberately held back by the insured in order to get

better terms in the insurance contract

When is the principles of utmost good faith not violated- It is not violated if

following are not disclosed:-

Facts relating to law

Facts relating to general knowledge

Facts discoverable by insurance surveyor during risk inspection

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