The contract of insurance is one where the highest degree of good faith is required from the parties. The exercise of such good faith requires that each party shall disclose to the other all material facts known to him, and that all material representations shall be substantially true.13 The concealment of a fact that should have been made known renders the insurance contract voidable.

12 American Mut. Aid Soc. vs. Helburn, 85 Ky., 1; 2 S. W., 495.

13 "In England the insured is under obligation to disclose to the insured every material fact that is or ought to be known to the insured. The presence of a corrupt intent on the part of the insured is wholly immaterial.

In the United States, the rule as stated above applied only to marine insurance. In making contracts of fire and life insurance, the insured must disclose

(a) All facts as to which inquiries are made.

(b) All other material facts, the concealment of which would amount to bad faith."

Vance on Insurance, Secs. 90-91.

"In marine insurance the misrepresentation or concealment by the assured of a fact material to the risk will avoid the policy, although no fraud was intended. It is no answer for the assured to say that the error or suppression was the result of mistake, accident, forgetfulness or inadvertence. It is enough that the insurer has been misled, and has thus been induced to enter into a contract which, upon correct and full information, he would either have declined, or would have made upon different terms. Although no fraud was intended by the assured, it is nevertheless a fraud upon the underwriter and avoids the policy. Bridges vs. Hunter, 1 Maule & Selw., 15; Macdougall vs. Fraser, Doug., 260; Fitzherbert vs. Mather, 1 T. R., 12; Carter vs. Boehm, 3 Burr., 1905; Bufe vs. Turner, 6 Taunt, 338; Curry vs. Commonwealth Ins. Co., 10 Pick., 535; N. Y. Bowery Ins. Co. vs. N. Y. Fire Ins. Co., 17 Wend., 359; 1 Marsh Ins. (Condy), 451-453-465, 1 Phil. Ins., 214, 303. The assured is bound, although no inquiry is made, to disclose every fact within his knowledge which is material to the risk. But this doctrine cannot be applicable, at least, not in its full extent, to policies against fire. If a man is content to insure my house without taking the trouble to inquire of what materials it is constructed, how it is situated in reference to other buildings, or to what uses it is applied, he has no ground for complaint that the hazard proves to be greater than he had anticipated, unless I am chargeable with some misrepresentation concerning the nature or extent of the risk. It is, therefore, the practice of companies which insure against fire to make inquiries of the assured in some form, concerning all such matters as are deemed material to the risk or which may affect the amount of premium to be paid. This is sometimes done by the conditions of insurance annexed to the policy, and sometimes by requiring the applicant to state particular facts in a written application for insurance. When thus called upon to speak, he is bound to make a true and full representation concerning all the matters brought to his notice, and any concealment will have the like effect as in the case of a marine risk. (See 1 Phil. Ins., 284, 285, ed. of 1840.) It is not necessary, for the purpose of avoiding the policy, to show that any fraud was intended. It is enough that information material to the risk was required and withheld." 14