Page 56 - Ebook IC S01

Survey And Loss Assessment IC-S01

The principle of utmost good faith applies to facts which the insurer knows and also

to the facts which he ought to know.

Examples of material facts

Life insurance: self medical history, family history, nature of job, food habits

Fire insurance: type of construction of building, goods stored in the vicinity,

maintenance

Marine insurance: nature of goods, packing

Motor insurance: type of vehicle, used for commercial or personal, details of

driver

The duty to disclose material facts depends on the type of insurance. In case of life

insurance the duty to disclose the material fact ends with the completion of the

contract. In case of nonlife insurance contract the duty continues till the cover is

operational. If after commencement of the risk there is change in the nature of the

risk the insured must inform the insurer.

The duty to disclose material facts revives at the time of renewal of the policy. The

renewal of the policy is virtually regarded as a fresh contract.

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