Utmost Good Faith

Akopọ

When you buy a shirt, the seller need not warn you that it shrinks; you can inspect it and decide for yourself. Insurance is different. The insurer cannot see inside your warehouse, read your medical history or watch how you drive, so it must trust what you tell it. That trust is not left to chance. The law raises every insurance contract to a higher standard of honesty called utmost good faith, and it places a positive duty on you to volunteer every fact that matters.

In this lesson you will learn what utmost good faith means and why insurance, above almost every other contract, demands it. You will learn how to tell a material fact from an unimportant one, which facts you must disclose and which you may keep to yourself, and exactly how a policy can collapse through non-disclosure, concealment or misrepresentation. Above all you will learn the distinction examiners test every year: innocent breach against fraudulent breach, and the very different remedy each one hands the insurer.

Awọn Afojusun

  1. Define utmost good faith and explain why insurance contracts demand it
  2. Explain the duty of disclosure and identify what counts as a material fact
  3. Distinguish facts that must be disclosed from those that need not be
  4. Describe the breaches of utmost good faith: non-disclosure, concealment, innocent and fraudulent misrepresentation
  5. State the effect of each breach on the validity of the policy

Akọ̀wé Ẹ̀kọ́

Emeka applies for a health policy and, embarrassed about it, says nothing of the heart condition he was treated for last year. The insurer, knowing none of this, happily issues the cover. Eight months later Emeka is hospitalised and submits a large claim. The insurer investigates, discovers the earlier illness, and refuses to pay a single naira. Emeka is furious: he never lied, he says, he was simply never asked. Whether the insurer is right turns entirely on one principle, the one that sits underneath every proposal form you will ever sign: the duty of utmost good faith. Master it and you can predict how a dispute like Emeka's will end before a court ever does.

Ìdánwò Ẹ̀kọ́

Oriire fun ipari ẹkọ lori Utmost Good Faith. Ni bayi ti o ti ṣawari naa awọn imọran bọtini ati awọn imọran, o to akoko lati fi imọ rẹ si idanwo. Ẹka yii nfunni ni ọpọlọpọ awọn adaṣe awọn ibeere ti a ṣe lati fun oye rẹ lokun ati ṣe iranlọwọ fun ọ lati ṣe iwọn oye ohun elo naa.

Iwọ yoo pade adalu awọn iru ibeere, pẹlu awọn ibeere olumulo pupọ, awọn ibeere idahun kukuru, ati awọn ibeere iwe kikọ. Gbogbo ibeere kọọkan ni a ṣe pẹlu iṣaro lati ṣe ayẹwo awọn ẹya oriṣiriṣi ti imọ rẹ ati awọn ogbon ironu pataki.

Lo ise abala yii gege bi anfaani lati mu oye re lori koko-ọrọ naa lagbara ati lati ṣe idanimọ eyikeyi agbegbe ti o le nilo afikun ikẹkọ. Maṣe jẹ ki awọn italaya eyikeyi ti o ba pade da ọ lójú; dipo, wo wọn gẹgẹ bi awọn anfaani fun idagbasoke ati ilọsiwaju.

  1. The principle of utmost good faith requires a proposer to: A. Disclose only the facts the insurer asks about B. Disclose voluntarily every material fact known to the proposer C. Disclose facts only after a claim is made D. Rely on the insurer to inspect the risk Answer: B
  2. A material fact is one which: A. The proposer personally considers interesting B. Would influence a prudent insurer in accepting or rating the risk C. Is written in every proposal form D. Only becomes relevant after a loss Answer: B
  3. Which of the following need NOT be disclosed to the insurer? A. A previous fire at the premises to be insured B. A previous policy cancelled by another insurer C. A newly fitted burglar alarm that reduces the risk D. A serious illness on a life proposal Answer: C
  4. A false statement of fact made honestly in the belief that it is true is: A. A fraudulent misrepresentation B. An innocent misrepresentation C. Concealment D. A warranty Answer: B
  5. Where a proposer is guilty of fraudulent misrepresentation, the insurer may: A. Avoid the policy but must return the premium B. Only reduce the claim proportionately C. Avoid the policy, refuse the claim and retain the premium D. Do nothing, as the policy is fully valid Answer: C

Awọn Iwe Itọsọna Ti a Gba Nimọran

Principles of Risk Management and Insurance
Principles of Risk Management and Insurance
Atunkọ: Thirteenth edition
Olùtẹ̀jáde: Pearson
Odún: 2016
ISBN: 978-0-13-408257-8
Apejuwe: The standard introduction to risk and insurance, covering risk management, insurer operations and the main lines of life, health, property and liability cover.
Fundamentals of Risk and Insurance
Fundamentals of Risk and Insurance
Atunkọ: Tenth edition
Olùtẹ̀jáde: Wiley
Odún: 2008
ISBN: 978-0-470-08753-4
Apejuwe: A clear account of the nature of risk and the economics of insurance, written for beginning students across life, health, property and liability insurance.
Fundamentals of Insurance
Fundamentals of Insurance
Atunkọ: Second edition
Olùtẹ̀jáde: Himalaya Publishing House
Odún: 2017
ISBN: 978-93-5097-079-9
Apejuwe: An accessible treatment of insurance in four parts: the basics of risk, insurance management, life insurance and non-life insurance.

Àwọn Ìbéèrè Tó Ti Kọjá

Ṣe o n ronu ohun ti awọn ibeere atijọ fun koko-ọrọ yii dabi? Eyi ni nọmba awọn ibeere nipa Utmost Good Faith lati awọn ọdun ti o kọja.

WAEC SSCE - Insurance - 2015

Ibeere 1 Ìròyìn

List and explain five principles of insurance.

Wo Idahun