What are warranties in the context of insurance policies?

Warranties in the context of insurance policies refer to promises made by the insured regarding specific facts or conditions that are essential to the agreement between the insurer and the insured. These promises are crucial because they form an essential part of the risk assessment that the insurer undertakes when issuing a policy.

When an insured makes a warranty, they are asserting that a certain condition is true, and these assertions must be maintained for the policy to remain in force. If a warranty is breached, it can lead to a denial of coverage or even cancellation of the policy. For example, in a property insurance policy, a warranty may state that the insured maintains a certain security system; failure to have that security system operational could be grounds for the insurer to refuse a claim related to theft.

The other options refer to different aspects of insurance. Risks insured relate to the types of losses that are covered under the policy, exclusions for coverage specify what is not covered, and types of claims refer to the various claims that can be filed under the policy. None of these captures the specific contractual promise aspect that warranties represent. Thus, the understanding of warranties as promises about facts is fundamental in grasping their significance within an insurance contract.