Henderson owned a concrete block building valued at $20,000. Because it was virtually fireproof, he insured it for only $10,000 under a policy of insurance which contained an 80% co-insurance clause. Some time later, the building was damaged by fire. A fire insurance policy is a contract of utmost good faith.

Question

Quizplus · Accepted Answer

A fire insurance policy, like all insurance policies, is indeed a contract of utmost good faith (uberrima fides), requiring both parties to disclose all material facts that could influence the decision of the other party in entering into the contract.

Henderson Owned a Concrete Block Building Valued at $20,000