Uberrimae Fidei
Uberrimae Fidei is the Latin term meaning Utmost Good Faith. In car insurance contracts, like in all contracts of insurance, it was accepted as a ground rule demanding that both insured and insurer must act with the utmost good faith in their dealings with one another. The principle of Uberrimae Fidei implies that both parties will not withhold any information of a material nature regarding the object of insurance and the contract itself. An example: a material fact is one that, if withheld by the insured person, could have influenced the insurer not to accept the risk.
In a landmark court case in 1985 the Appeals Court found that utmost good faith was an impractical concept as faith is either good or bad – a person cannot be more honest than honest. Since then Uberrimae Fidei was accepted to have “no particular meaning” in South African law and is seen as meaning the same as good faith (bona fides.)
This decision does not do away with the fact that any misleading information or nondisclosure of information will lead to the contract being null and void. For example, misleading the insurance company about using your car for business purposes will result in any claims being rejected. The reasonable man’s test has become the measure used to determine the level of disclosure of information when dealing with insurance contracts. See the entry for reasonable man test in this glossary for further information.