Q.Which principle of insurance requires the insured to disclose every material fact relevant to the risk, honestly and completely, even without being specifically asked?

Insurance replaces the ordinary "let the buyer beware" rule with a special duty of honest, complete disclosure, because only the proposer truly knows the facts of the risk.

The Principle of Utmost Good Faith (Uberrimae Fidei) requires both parties, and especially the insured, to disclose every material fact relevant to the risk, honestly and completely, even without being asked. Concealing or misrepresenting a material fact makes the policy voidable at the insurer's option, whether or not that fact actually caused the loss.

Option-by-option analysis:

• (a) Incorrect — indemnity concerns the AMOUNT payable (limited to actual loss), not disclosure of facts. …