How do warranties differ from representations in insurance contracts?

Warranties in insurance contracts are statements that are guaranteed to be true and must be strictly adhered to throughout the life of the contract. If a warranty is found to be untrue, it can result in the nullification of the contract, meaning the insurer may deny coverage or rescind the policy. On the other hand, representations are statements made by the insured that are believed to be true to the best of their knowledge. While they are expected to be honest, they do not carry the same absolute guarantee as warranties. If a representation turns out to be false, it does not automatically void the contract unless it is proven that the misinformation was material to the insurer's decision to underwrite the policy or if it was made with intent to deceive.

This understanding of the differences highlights the importance of both warranties and representations in insurance, where the former offers a stronger legal standing and consequences for breach than the latter. The other options do not accurately capture this fundamental distinction.