What does the term warranty refer to in insurance contracts?

In insurance contracts, the term warranty refers to an assurance based on the insured's application. A warranty is a specific statement made by the insured that forms part of the contract and is a guarantee that certain conditions or facts are true. If a warranty is found to be untrue or if the insured fails to comply with the warranty conditions, the insurer may have the right to void the policy or deny a claim. This contrasts with mere representations, which are statements that may not hold the same binding legal effect.

For example, if an applicant claims that the property is equipped with a security system as part of their coverage application, and this claim is later found to be inaccurate, it could constitute a breach of warranty, leading to potential consequences under the insurance policy. This highlights the critical nature of warranties in establishing trust and accuracy in the insurance relationship.