WARRANTIES AND REPRESENTATIONS

REPRESENTATIONS

Are statement believe to be true to the best of one's knowledge, but they are not guaranteed to be true. For insurance purposes, representations are the answers the insured gives to the questions on the insurance application.

MATERIAL MISREPRESENTATION

Is a statement that, if discovered, would alter the underwriting decision of the insurance company. Furthermore, if material misrepresentation are INTENTIONAL, they are considered fraud.

WARRANTY

Is an absolutely true statement upon which the validity of the insurance policy depends. Breach of warranties can be considered grounds for voiding the policy or a return of premium. Because of such a strict definition, statements made by applicants for life and health insurance policies are usually not considered warranties, except in cases of fraud.

MISREPRESENTATIONS

Untrue statements on the application could avoid the contract.