General Insurance PrinciplesPregunta 177 de 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
Explicación
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.
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