Utmost good faith requires which core duty from both parties?

• A. Complete honesty by both parties
• B. Premium payment on time
• C. The insurer to renew automatically
• D. Claims filed within 30 days

Answer: (A)

Utmost good faith in insurance means both the insured and the insurer must act with complete honesty and disclose all material facts. For the insured, this means sharing information that could affect the underwriting or premium decisions, such as relevant health history or past claims. For the insurer, it means clearly communicating policy terms, coverage limits, and exclusions, and not concealing important details or misrepresenting what is covered. If either side withholds or misstates material information, the contract can be voided or claims denied because the agreement rests on truthful, full disclosure. The other options describe punctual payments, administrative renewals, or claims timing, which are not the fundamental mutual honesty obligation that underpins utmost good faith.