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The Doctrine of Utmost Good Faith

Many of us are familiar with insurance policies, and have at least one type of insurance coverage. However, you may not realize that an insurance policy is basically a contract between you and the insurance company. Your insurance company agrees to provide you with a certain level of insurance coverage, and you agree that you have provided truthful information in applying for the coverage. Like other types of contracts, insurance contracts include a requirement that both parties conduct themselves with a high level of honesty and integrity. Read on to learn more about the doctrine of the utmost good faith.

Insurance Contracts and Good Faith

The doctrine of the utmost good faith—sometimes referred to by its Latin name, uberrimae fides—is a contractual legal doctrine that requires contracting parties to act honestly and not mislead or withhold any information that is essential to the contract. The parties to an insurance contract include the insurer—meaning the licensed insurance agent or broker—and the applicant or insured. An applicant is a person who is seeking to buy insurance as an individual, or on behalf of a business. Once an applicant is offered an insurance policy, has paid the initial premiums, and has received the policy, she becomes the insured party.

An insurance policy is a document that sets forth the terms and conditions of the coverage and serves as the formal insurance contract. In contracting with applicants, insurance companies gather certain information that’s critical to the decision to insure an applicant or not, and in setting premium prices. It’s in the disclosure of this crucial information that the doctrine of good faith comes into play.

How the Doctrine of Utmost Good Faith Works

In the context of insurance contracts, the doctrine of utmost good faith requires the full and accurate disclosure of relevant information.


The doctrine of good faith requires that both parties to an insurance contract must honestly disclose all relevant information. As applied to the insurance company, this means honestly providing premium figures and coverage limitations. Applicants must truthfully disclose all requested pertinent personal information.

For example, if you’re applying for car insurance, you'll be required to disclose information like any prior accidents or traffic tickets, and information about your residence, income, and education level. If you're applying for life insurance, you will be asked to provide information about your health background and family history. The doctrine of the utmost good faith requires that you honestly provide all "material" information.

A representation is considered "material" if the insurer relies on it in making decisions about the applicant in question. A material statement that is false or untrue is known in the law as a "misrepresentation." If an applicant intentionally and knowingly made material misrepresentations, this means that the insurer can void any resulting insurance contract.


Concealment is closely related to misrepresentation. However, while a misrepresentation is a false or misleading statement of material fact, concealment refers instead to the intentional omission of material information.

An insurer can void an insurance contract, or deny payment on a claim due to concealment if:

  1. The insured knew that there was a fact that was important in regard to that insurance policy, and
  2. The insured intentionally withheld that fact with the intent to defraud the insurer.


Another element of the requirement for the utmost good faith is warranties, which are promises by an insurance applicant to do certain things or satisfy certain requirements. Warranties ultimately become part of the insurance contract. If an insured breaches a warranty, an insurer may have grounds to void an insurance contract.

Get Legal Help with Insurance Issues

If you believe that the conduct of a party to an insurance contract has fallen below the requirements of good faith, there may be legal remedies available to you. A good first step is conferring with an attorney experienced with the practice of insurance law.

You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help

Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.

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Next Steps

Contact a qualified attorney to assist with any issues related to insurance.

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