https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3AGood_faith 2026-06-14T11:56:31Z Revision history for this page on the wiki MediaWiki 1.43.8 https://www.insurerbrain.com/w/index.php?title=Definition:Good_faith&diff=7685&oldid=prev 2026-03-10T13:13:43Z

<p>Bot: Creating new article from JSON</p> <p><b>New page</b></p><div>🤝 &#039;&#039;&#039;Good faith&#039;&#039;&#039; is a foundational legal and ethical principle in insurance that obligates all parties to an [[Definition:Insurance contract | insurance contract]] — [[Definition:Policyholder | policyholders]], [[Definition:Insurance carrier | insurers]], and [[Definition:Insurance intermediary | intermediaries]] — to deal honestly, disclose material information, and refrain from actions intended to deceive or unfairly advantage one side. Insurance contracts are classified as contracts of &#039;&#039;uberrimae fidei&#039;&#039; (utmost good faith), a standard higher than that applied to ordinary commercial agreements, because the insurer relies heavily on information provided by the applicant to assess and price [[Definition:Risk | risk]]. This elevated duty has roots stretching back centuries in marine insurance and remains embedded in insurance law across most jurisdictions.<br /> <br /> ⚙️ On the policyholder&#039;s side, good faith requires accurate and complete disclosure of [[Definition:Material fact | material facts]] during the [[Definition:Insurance application | application]] process and throughout the policy period — failing to disclose a known hazard, for example, can give the insurer grounds to [[Definition:Rescission | rescind]] the policy or deny a [[Definition:Insurance claim | claim]]. On the insurer&#039;s side, good faith demands fair and timely [[Definition:Claims handling | claims handling]], reasonable investigation of losses, and honest communication about coverage determinations. When an insurer unreasonably delays payment, denies a valid claim without adequate basis, or prioritizes its own financial interest over its contractual obligations, the policyholder may pursue a [[Definition:Bad faith | bad faith]] action — a legal claim that can result in damages well beyond the original policy limit, including [[Definition:Punitive damages | punitive damages]] in many U.S. states.<br /> <br /> ⚖️ Courts and [[Definition:Insurance regulator | regulators]] treat good faith as more than an abstract aspiration; it is an enforceable standard with real financial consequences. [[Definition:Bad faith | Bad faith]] litigation has shaped insurer behavior significantly, driving carriers to invest in [[Definition:Claims management | claims best practices]], detailed documentation, and internal compliance reviews. The principle also influences [[Definition:Reinsurance | reinsurance]] relationships, where the duty of utmost good faith underpins the cedent&#039;s obligation to share accurate [[Definition:Bordereaux | bordereaux]], loss data, and underwriting information with its [[Definition:Reinsurer | reinsurer]]. In an era of [[Definition:Artificial intelligence | algorithmic decision-making]] and automated claims triage, maintaining good faith requires insurers to ensure that technology-driven processes produce outcomes as fair and transparent as those expected of human judgment.<br /> <br /> &#039;&#039;&#039;Related concepts&#039;&#039;&#039;<br /> {{Div col|colwidth=20em}}<br /> * [[Definition:Bad faith]]<br /> * [[Definition:Material fact]]<br /> * [[Definition:Rescission]]<br /> * [[Definition:Utmost good faith]]<br /> * [[Definition:Claims handling]]<br /> * [[Definition:Duty of disclosure]]<br /> {{Div col end}}</div>

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