What is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?

A warranty in the context of insurance is a statement or promise that is guaranteed to be true. It is a fundamental aspect of the insurance contract, where the insured guarantees that specific conditions or facts are correct. If a warranty is found to be untrue, this can lead to a breach of the insurance contract, allowing the insurer to void the policy or deny a claim related to that warranty.

For instance, if an insured provides a warranty stating that a property is equipped with a security system, and it is later discovered that this statement is false, the insurer might have grounds to refuse coverage based on the breach of that warranty. This highlights the importance of warranties in the underwriting process and in the enforcement of insurance contracts.

In contrast, representations are statements made by the insured that are believed to be true at the time they are made but are not guaranteed. Exemptions refer to specific conditions or situations under which coverage is not provided. Clauses typically refer to sections or stipulations in the contract but do not carry the same guarantee of truth as a warranty does. Thus, a warranty is the only choice that represents a binding statement where untruth may lead to significant consequences in an insurance context.