Insurance Contract

Both the applicant and the insurer to deal honestly and disclose material facts — Insurance contracts are contracts of utmost good faith: both parties must act honestly. Because the insurer relies heavily on the applicant's statements of health, habits, and history, the applicant must disclose material facts truthfully; the insurer, in turn, must deal fairly and may not profit by concealing information from the applicant. This mutual obligation is the foundation of the concealment, representation, and warranty rules found in the California Insurance Code.

National insurance concept

Only the insurer makes a legally enforceable promise; the insured's obligations are conditions, not promises — A unilateral contract has only one enforceable promisor — the insurer promises to pay covered benefits. The insured's duties (pay premiums, cooperate, provide proof of loss) are generally conditions that must be met to keep the promise alive, not themselves enforceable promises. If the insured stops paying premiums, the insurer is released; the insured, however, can generally sue to enforce the insurer's promise to pay benefits.

National insurance concept