ABSTRACT
One of the most important principles of the contract of insurance is the utmost good faith in which one of the parties to the contract, the insured, is expected to disclose every material facts at his disposal to the insurer at the commencement of the insurance contract in order not to void the contract abinitio. The failure on the part of the insured not to disclose or to make misrepresentation will automatically void the contract abinitio or to exclude the other party insurer from liability of any claim that may arise under such contract. This dissertation has attempted to look at the principle of good faith worldwide, by tracing the historical background of insurance, the theoretical development of insurance, emergence of insurance companies in Nigeria and by widely studying the general principle of insurance contract and the claim settlement experience of insurance in Nigeria whether there is fairness in the operation of the principle or not. When emphasis shall be laid on the law of utmost good faith, the principle of Caveat Emptor, overview of the principle of utmost good faith, the meaning of materials facts and the duration of the disclosure under the policy of insurance, the role of intermediaries as regard the law of utmost good faith and of course remedies for breach of utmost good faith. The dissertation concluded by looking at the utmost good faith and its impact on claims settlement in Nigeria as regard common law, statues and relevant cases in Nigeria and abroad; recommendation proffered on the inequality on the operation of utmost good faith and the general expectation from insurance as a whole.