What is the principle of 'utmost good faith' (uberrimae fidei) in insurance contracts?

Utmost good faith (uberrimae fidei) is the principle that an insurance contract requires a higher standard of honesty than ordinary commercial contracts, with both parties — especially the applicant — obligated to disclose all material facts truthfully. The insured must honestly disclose information the insurer needs to assess risk (since the insurer relies on it for underwriting), and the insurer must deal fairly with the insured. Breaches can involve concealment (failing to disclose a material fact) or misrepresentation (stating a material falsehood), which may void coverage. This principle underlies the duty of honest disclosure in applications. Understanding utmost good faith is foundational across all insurance lines.