THE PRINCIPLE OF GOOD FAITH

What it means is that the insured is obliged to inform clearly and carefully about all important facts relating to the subject matter insured.

Even this principle to explain the risks that are secured or exempted, all terms and conditions of coverage are clearly and accurately.

The obligation to provide essential facts are valid:

1. Since the agreement concerning the insurance agreement is finished talking to the insurance contract was made, namely when the Insurers agree to the contract.

2. At the time of renewal of insurance contracts.

3. In the event of a change in insurance contracts and about the things that have anything to do with those changes.

4. Do not hide the clear proofs and correct required of each party.

When a building likened to an insurance agreement, then the principle of Good Faith is the foundation, meaning that if the foundation is not constructed properly, it is feared Buildings insurance agreement that would have collapsed or failed to achieve its objectives. In some cases insurance, the problem of the principle of Good Faith is often the main problem.

Principle of Good Faith or principle of good faith implies both parties. the Insured and the Insurer. must underlie reciprocal agreement / contract of insurance with very good intentions. This means: no hide descriptions are clear and properly required of each party. 

More than that, the words "Very" listed in the principle of Utmost Good Faith, tend to be directed to the Insured, with the following considerations: Insured who will transfer risk to the Insurance Company or the Insurer, to know everything about the object to be insured, while the Insurer did not know anything.

Indeed Insurers can do the survey for such risk when surveypun letapi there are still some very important data information (very material) known to the Insurer, for example:
Have the object coverage is experiencing the loss? When and how the amount of the losses, whether the other insurance policy that has been or ever close the insurance coverage of the object in question?

Insurance Premium Comparison between the price of coverage or the burden of risk that will be borne by insurance companies, very much.

In that case. position between the Insured and the Insurer becomes unbalanced. Assured know everything about the insured object would divert risks to the Insurer that do not know much about the object in question must accommodate the burden of risk was much heavier than the insurance premiums.

-Definitive Definition

Definitely Very Good faith obligation (Utmost Good Faith) can be defined: "a positive obligation to do voluntarily to disclose all material facts in lengkapjelas and right about the risks to be transferred to the Insurer, whether asked or not. What is the Material or Material Facts Facts?

Material Facts are important remarks about the objects insured and the risks will be transferred from the Insured to the Insurer, testimonies of the Insurer is required to establish acceptance policy, Tariff setting premiums and coverage Develop Conditions (Terms & Conditions).

-The facts on what to reveal Candidate Insured

The facts about a situation or condition of the insured object that is internally and externally increases the risk. (Building with wood construction, stock goods consisting of combustible materials, Environmental building meeting.)

1. The facts about the claims experience that never existed.

2. The experience of previous insurance coverage.

3. Other technical facts relating to insured object itself (Construction, Location, occupational, etc.).

4. What about the Insurer's liability?

Through its agent or directly, the Insurer must also show very good faith in return, among others:

1. Explain what is included insurance coverage, what about the exception-exception.

2. Provide training on product knowledge on an ongoing basis for the agency to AVOID the error delivery agent information to the customer.

3. Handles well every problem faced by the agents, including cracking down firmly agents is problematic.

4. Material facts and other important explanations can be given in oral form through consultation / interview or in writing by letter or filling SPPA.

For the futher understanding what I have been explaining above, it’s the best one if  I take an example

Example: 

Me, i my self make my building, my house insure insurance companies, especially for the one  on the issue collapsed when the earthquake hit. (But i hide on the insurance company that has cracked walls of his house) and then one day a small earthquake, then the house collapsed and i want to make a claim my insurance. The insurance company refused because iam with holding information that i have cracked the walls of the house earlier.