Utmost Good Faith - December 2009

This regularly updated section of the HomeApproved web site will cover the latest trends, research, opinion and developments in the UK car insurance sector. 

Utmost Good Faith
Utmost Good Faith means that each party to a proposed insurance contract is legally obliged to reveal to the other all information and materials facts, which would influence the other’s decision to enter into the contract, whether such information is requested or not.

Industry research suggests that approximately 10% of individuals applying for car insurance lie by giving false information or by omission, not telling the whole truth. If you are one of that 10% beware because insurers are getting far better at spotting the signs where motorists are not telling a true story when they apply, and even better at investigating these cases and cancelling cover where necessary.

Every contract of insurance is a legal document and is subject to the principle of utmost good faith which obliges the individual to disclose ANY detail which may be of importance to the insurer WHETHER IT IS REQUESTED OR NOT. Surprised? Many people whose claims are denied or whose cover is cancelled are! You have tell the whole truth or that contract of car insurance can claimed to be invalid and summarily cancelled.

Concealment
Concealment is the intentional failure to reveal a material fact, which would influence a prudent underwriter in deciding whether to accept or reject a risk and what rate to charge and what conditions to impose.

Misrepresentation
Misrepresentation is the giving of false or misleading information on the material fact.

Concealment and/or misrepresentation gives the aggrieved party the right to avoid the motor insurance contract.

ENDS

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