Utmost good faith describes the expectation of honesty and fair disclosure in insurance dealings. Applicants should disclose relevant information accurately, and insurers should explain the offered protection fairly. The detailed legal duties and consequences of a breach differ between jurisdictions and product types.
In Nepal, an applicant should provide truthful answers about health, vehicle use, or previous losses and seek clarification about ambiguous questions. Keeping proposal form copies supports that record. International discussions sometimes use this traditional term broadly, but modern disclosure rules may be more specific than the phrase suggests.