The courts expect that each party has entered an insurance contract in good faith, meaning that they have been entirely open, honest, and transparent with one another. Each is subject to legal consequences for committing any breach of good faith.
Some examples of good faith include:
- The customer must be honest when answering insurance questions and must cooperate with the insurance company; and
- The insurance company must be honest when stating the features of its insurance polices and pay claims as required by its policies.