Which term describes a guarantee that the statements on the application are true?

• A. Warranty
• B. Representations
• C. Covenant
• D. Indemnity

Answer: (A)

Guarantees about the truth of what’s on the application are described as warranties. A warranty is a promise that those answers are absolutely true. If a warranty is found to be broken, the insurer has a basis to void the policy or deny a claim, because the contract rested on that guaranteed truth. Representations are statements about facts to obtain coverage and are true to the applicant’s knowledge, but they’re not guaranteed in the same strict sense. Covenants are promises within the contract, not specifically about the truth of application statements, and indemnity concerns compensation for losses rather than truthfulness. So the best fit for a guarantee that the application’s statements are true is a warranty.