Concept:Insurance contracts require full honesty from both parties.
This is called
uberrimae fidei or "utmost good faith".
Explanation:Every insured person must reveal all material facts about the property.
The actual value is the true worth of the property.
The insured amount is what the insurer agrees to cover.
In Mr. R's case, his actual value is
₦150,000, but he is only insured for
₦40,000.
If he deliberately overstates the actual value, he is hiding the true facts from the insurer.
This act is dishonest and breaks the duty of utmost good faith.
Overstating value is not covered by indemnity, subrogation, or insurable interest.
Answer:Mr. R has violated the principle of
uberrimae fidei (utmost good faith).