A statement that is considered and guaranteed to be true

A statement that is considered and guaranteed to be true

• A. Warranty
• B. Representation
• C. Ambiguities
• D. Waiver

Answer: (A)

In insurance contracts, a warranty is a statement that the insured guarantees to be true. The insurer relies on this promise when underwriting and issuing the policy, so if the warranty is breached, coverage can be denied or the contract canceled, even if the loss didn’t arise from the breach. This distinguishes a warranty from a representation, which is a truthful-sounding statement made by the applicant that isn’t guaranteed to be true, and from ambiguities, which are unclear wording, or a waiver, which is giving up a right rather than asserting a guaranteed truth.

In insurance contracts, a warranty is a statement that the insured guarantees to be true. The insurer relies on this promise when underwriting and issuing the policy, so if the warranty is breached, coverage can be denied or the contract canceled, even if the loss didn’t arise from the breach. This distinguishes a warranty from a representation, which is a truthful-sounding statement made by the applicant that isn’t guaranteed to be true, and from ambiguities, which are unclear wording, or a waiver, which is giving up a right rather than asserting a guaranteed truth.