A representation is really a statement created by the proposer to the insurer concerning a proposed risk. This kind of representation may pertain to both material and immaterial facts.
If material, then a representation must certanly be substantially true. Any false statement on the material percentage of the actual fact would render the contract voidable.
A guarantee on another hand can be an undertaking by the insured to the consequence he shall or shall not perform a certain thing or that some conditions will be fulfilled or whereby he affirms or negatives the existence of a specific state of affairs.
Warranties might be either express or implied. Express warranties are those, which are mentioned in the policies, e.g., warranted no smoking inside the premises.
Implied warranties are those, which would apply even though not mentioned in the policy, e.g., warranty of sea-worthiness in marine insurance.
Distinction Between Representations and Warranties in Insurance
It is necessary to know the difference among representation and warranty and in this regard creating a mistake is very likely.
This kind of mistake would be indeed fatal particularly keeping because a breach of either warranty or representation might have an alternative bearing on the insurance contract.
The differences are:
A representation is needed to be substantially true, i.e., the material percentage of the statement must certanly be literally true even although the immaterial percentage of the statement do not need to be true or correct. On another hand a guarantee must certanly be strictly and literally complied with.
With regard to representation, if the insurers wish to prevent the contract on grounds of misrepresentation, it needs to be proved by the insurers that the misrepresentation relates to a material fact. On another hand, with regard to warranty any breach whether material or immaterial is sufficient for the insurers to prevent the contract.
A representation does not come in the policy, but a guarantee must come in the policy either expressly or through reference.
If material, then a representation must certanly be substantially true. Any false statement on the material percentage of the actual fact would render the contract voidable.
A guarantee on another hand can be an undertaking by the insured to the consequence he shall or shall not perform a certain thing or that some conditions will be fulfilled or whereby he affirms or negatives the existence of a specific state of affairs.
Warranties might be either express or implied. Express warranties are those, which are mentioned in the policies, e.g., warranted no smoking inside the premises.
Implied warranties are those, which would apply even though not mentioned in the policy, e.g., warranty of sea-worthiness in marine insurance.
Distinction Between Representations and Warranties in Insurance
It is necessary to know the difference among representation and warranty and in this regard creating a mistake is very likely.
This kind of mistake would be indeed fatal particularly keeping because a breach of either warranty or representation might have an alternative bearing on the insurance contract.
The differences are:
A representation is needed to be substantially true, i.e., the material percentage of the statement must certanly be literally true even although the immaterial percentage of the statement do not need to be true or correct. On another hand a guarantee must certanly be strictly and literally complied with.
With regard to representation, if the insurers wish to prevent the contract on grounds of misrepresentation, it needs to be proved by the insurers that the misrepresentation relates to a material fact. On another hand, with regard to warranty any breach whether material or immaterial is sufficient for the insurers to prevent the contract.
A representation does not come in the policy, but a guarantee must come in the policy either expressly or through reference.
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