What is a warranty in an insurance contract?

In an insurance contract, a warranty is defined as an absolutely true statement upon which the validity of the policy depends. This commitment means that the insured must adhere to the provided information accurately; failing to do so could result in the insurer being able to void the policy or deny a claim. Essentially, warranties are viewed as essential facts that must be upheld for the insurance agreement to remain valid.

This contrasts with promises made by the insurer, which typically refer to the obligations the insurer agrees to fulfill under the terms of the contract. Additionally, optional coverage provisions relate to extra coverages that can be purchased, and statements of potential risks generally serve to inform the insurer about possible exposures rather than functioning as binding covenants like warranties do. Thus, the concept of a warranty emphasizes accuracy and truthfulness in what is disclosed, aligning closely with the foundational requirements of an insurance policy.