What is a warranty in an insurance contract?

In the context of an insurance contract, a warranty refers specifically to an absolute true statement made by the insured that is a condition of the insurance agreement. This means that the warranty must hold true for the contract to be valid and enforceable. If the statement is found to be false, even if the misrepresentation was unintentional, it can lead to the denial of coverage or voiding of the policy.

Warranties are typically related to specific facts or conditions regarding the risk being insured. For example, in a life insurance policy, a warranty could involve the insured’s health status or whether they engage in certain high-risk activities. The importance of a warranty lies in its role in establishing trust and ensuring the insurer can accurately assess the risk they are taking on. Thus, it signifies an unconditional promise that the stated conditions will be maintained throughout the policy term.