What does the Principle of Utmost Good Faith require in an insurance contract?

• A. The insured must always misrepresent terms to maximize payout
• B. The claim adjuster has minimal responsibilities
• C. An insurance contract places serious responsibilities on the adjuster
• D. The policy is void if a claim is filed

Answer: (C)

Utmost Good Faith means both sides of an insurance contract must deal honestly and disclose all material information. In practice this places a duty on the adjuster to investigate claims thoroughly, evaluate coverage fairly, and settle claims in a truthful and timely manner. That’s why this option fits best: the contract indeed places serious responsibilities on the adjuster to handle the claim with integrity and diligence. The other ideas contradict the principle—misrepresentation by the insured undermines good faith, the adjuster’s role is not minimal, and a claim isn’t automatically void just because it’s filed.