Which term is used to describe the duty of mutual trust in insurance contracts?

The term that describes the duty of mutual trust in insurance contracts is "Utmost Good Faith." This principle, also known as "uberrima fides," requires both parties involved in the insurance contract—the insurer and the insured—to deal with each other honestly and disclose all relevant information.

In the context of insurance, it means that the insured must fully disclose all material facts that could affect the insurer's decision to provide coverage or determine the premium. Conversely, the insurer must also be honest about the terms of the coverage and any conditions that may apply. This duty of utmost good faith is foundational to the insurance relationship and ensures that both parties are protected and can trust each other.

Understanding utmost good faith is essential for recognizing the obligations that come with entering into an insurance contract, fostering a relationship based on trust and transparency.