General Insurance PrinciplesQuestion 177 of 474
The difference between a representation and a warranty on an insurance application is that a warranty:
a.is the insurer's own promise to renew the policy at the same rate
b.is only a statement the applicant believed to be true when it was made
c.is guaranteed to be true and becomes part of the contract itself
d.is a promise the agent adds orally at the time of the sale
Explanation
A warranty is guaranteed and written into the contract, so an untrue warranty is a breach of the contract itself. A representation only has to be substantially true to the best of the applicant's knowledge, and the insurer must show the untrue statement was material before it can rescind. The answer about renewal at the same rate confuses a warranty with a rate guarantee.
This topic, taught in full in the Personal Lines Insurance Producer guide. Personal Lines Insurance Producer — Complete Study Guide (2026) — PDF + EPUB, $19.99 · 14-day refund →
Practice all 474 questions free — no signup required.
Own the complete Personal Lines Insurance Producer guide — PDF + EPUB, $19.99 →
Related questions on this topic
- After a kitchen fire the insured refuses to submit a proof of loss or let the adjuster inspect the damage. The insurer may resist paying because the policy is:
- An insured sells her house and tries to hand her homeowners policy to the buyer. Under the personal-contract rule:
- The doctrine of utmost good faith in insurance contracting means that:
- An applicant knows the basement floods each spring and stays silent although the application asks about past water damage. This is:
- Two applicants each give the wrong roof age. One is guessing honestly and the other is hiding a claim history. Fraud is distinguished by:
- A bank holds the mortgage on a house and the owner's adult son lives there rent free. Insurable interest in the dwelling is held by:
Last reviewed: · editorial process
PrepPass team · Verified against California Personal Lines Insurance License Exam · How we review