CONSUMER ADVICE

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Principles of Insurance : Utmost Good Faith

Is the duty to disclose all material facts relating to the risk to be covered. A material fact is a fact which would influence the mind of a prudent underwriter in deciding whether to accept a risk for insurance and on what terms.

Examples:
Motor: Age of drivers, licence status, details of any accidents, claims or convictions, exact model of vehicle etc.
Household: Construction of house, location of house ie. close to river, any previous claims etc.

Duty of Disclosure applies to both the Proposer and the Insurer. Duty of disclosure operates at :

  1. inception - until the date cover is confirmed by the Insurers
  2. renewal - up to the renewal date
  3. mid term alterations - until the Insurers confirm cover in respect of the alterations

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