What does an insurance policy that acts in utmost good faith require from both parties?

An insurance policy that operates under the principle of utmost good faith, also known as "uberrima fides," requires both parties—typically the insurer and the insured—to act with honesty and transparency. This principle is foundational in insurance contracts because it emphasizes that both parties must disclose all material facts that could influence the agreement. The insured must provide truthful information regarding their risk profile, while the insurer must clearly explain the terms, conditions, and coverage characteristics of the policy. This mutual trust is essential to ensure fairness and prevent fraud, allowing the insurance contract to function effectively.

The other options do not encapsulate the essence of utmost good faith as effectively as honesty does. For instance, secrecy would contradict the need for transparency and full disclosure between the parties. A trial period is not typically a requirement in insurance contracts; instead, such arrangements are more common in other types of agreements. Lastly, while a written agreement is essential in formalizing an insurance policy, it does not address the ethical obligations of honesty that are central to the principle of utmost good faith.