Explain the difference between representations and warranties in an insurance contract.

• A. Representations are truthful statements made by the applicant; warranties are promises guaranteed true for the policy term; breach of a warranty may void coverage.
• B. Representations are promises guaranteed true for the policy term; warranties are statements made by the applicant.
• C. Representations apply to the insurer; warranties apply to the insured.
• D. Representations and warranties are the same.

Answer: (A)

Representations are statements of fact the applicant makes about the risk being insured; they describe the situation being insured and must be true to the best of the applicant’s knowledge. Warranties are contractual promises that certain facts or conditions will be true for the entire policy term. Because warranties are part of the contract, breaching a warranty can void coverage or deny a claim, even if the loss is otherwise covered. This distinction is why the correct description emphasizes truthful statements by the applicant for representations and promises guaranteed true for the policy term for warranties, with breach potentially voiding coverage. The other options mix up who makes the statements or treat representations and warranties as the same, which isn’t accurate.