Understanding the 7 Principles of Insurance – The Foundation of Every Insurance Contract Introduction Insurance plays a vital role in protecting individuals and businesses from financial loss. But have you ever wondered what makes an insurance contract valid and fair for both the insurer and the insured? The answer lies in the principles of insurance . These principles are the core rules that guide every insurance policy and ensure trust, transparency, and fairness in the entire process. In this article, we’ll explore the seven main principles of insurance , explained in simple terms with real-life relevance. 1. Principle of Utmost Good Faith (Uberrimae Fidei) Both the insurer and the insured must be completely honest with each other. The insured must disclose all relevant facts — for example, a person applying for health insurance should reveal any existing health conditions. Likewise, the insurer must clearly explain the terms, conditions, and ex...