Welcome to the Warranties and Representations course. The purpose of this course is to arm you, the insurance adjuster and insurance agent, with the relevant and adequate knowledge on matters pertaining to Warranties and Representations. At the end of this course, you should be capable of understanding the basics of Warranties and Representations.

Please be guided that the contents of this course should only serve as guidance and an overview of the course. All the materials covering Warranties and Representations cannot be exhaustively covered under the course due to their dynamic nature. You are therefore encouraged to use supplementary materials on the topic to equip yourself further. 

The content of the course shall be as hereunder:

  1. Warranties
  2. A Brief on Common law
  3. Representations
  4. Warranties vs Representations
  5. Sample warranties and Representations provisions from different states)
  6. Case laws


In most contexts, a Warranty is used to refer to a type of assurance given by a party mostly manufacturers of goods about the state of a product. It is also used in reference to the terms and circumstances under which the product will be repaired or exchanged if it does not work as claimed or intended. These warranties often come with limitations such as time limit within which they may be applied and the situation within which the product might not be made good. Express and Implied warranties are the main types of warranties herein, and various other warranties stem from these two types.

However, for our purposes herein, i.e., insurance, a Warranty is a promise by the insurance applicant to perform certain actions or fulfill specific criteria, or a statement of fact that the insurance applicant attests to. The Warranty is a part of the insurance policy and is not separate. In most insurance contracts, the insured is typically required to make certain warranties. When applying for health insurance, for example, an insured party may be asked to attest that he does not have a terminal illness in order to acquire coverage. Contracts for insurance include warranties as a means of limiting the risks that the insurance company is willing to assume on its own. Warranties can be both express and implicit in nature. All of the warranties that are specified in the policies are considered express warranties. A Warranty of seaworthiness in marine insurance is an example of an implied Warranty that applies even if it isn’t specifically stated in the policy; instead, it is considered to exist, as is the case with other implied warranties. 

Warranties in insurance contracts may also be: affirmative and promissory. A statement about a fact at the time the contract was made is known as an affirmative Warranty; this can be compared to a Representation. An affirmative Warranty is a clause in a policy that states that certain facts about a risk are accurate, or that particular acts have been or will be performed. A promissory Warranty is a declaration that refers to future events or facts that will remain true during the policy’s term. Generally, an insurance contract is worthless from the start if the affirmative Warranty is false, and if a promissory Warranty is proven to be true, the insurer may cancel coverage when the Warranty is proven to be false. The phrasing of Warranty provisions should indicate whether they are affirmative or promissory. 

The general rule in Warranties is that a Warranty is fatal to the contract, even if the statement is insignificant or even small in character, and the error is attributable to an honest and even unavoidable mistake. If an insured party’s Warranty is found to be false, the insurer may cancel the policy and refuse to pay claims. The statement must be expressly included in the contract as a condition or Warranty, and the provision must clearly show that the parties intended for the insured and insurer’s rights to be dependent on the truth of the statement. 

In the past, if a Warranty was infringed even by a hair, insurers could refuse to reimburse the claim. 

As a result, states and courts have loosened the doctrine. A number of states have enacted legislation stating that; statements made in an application are regarded as Representations rather than warranties, and no misrepresented Warranty should result in the cancellation of an insurance contract provided the Misrepresentation was not fraudulent and did not enhance the risks covered by the insurance contract. Other states provide that Warranty is not broken if there is a temporary or slight increase in risk, and other states state that the breach in Warranty must actually contribute to the loss. 

A return of premiums paid under the policy is sometimes required by statute as a condition antecedent to bringing a claim for breach of Warranty but some jurisdictions have held otherwise, that return of premiums is not a must. (Woodward v. Ins. Co., 106 N. W. 681 (Wis.) Austin v. Ins. Co., 132 Fed. 555.)

A Brief on Common law

The parties were free to negotiate their own terms under common law, an insurance policy’s validity was based on the validity of the insured’s Warranty, and if it failed, so did the policy. In Society v. Llewellyn, the court stated that “parties have a right to contract in this wise if they will,” indicating the common law court’s position on the matter. Warranties and Representations were used to classify these statements. When the insured explicitly acknowledged that the contract’s validity hinged on the truth of a specific statement in the application, that was a Warranty of fact. According to the policy, the statement’s meaning had to be determined only by the policy’s language. The issue was solely on construction.  If it was obvious from a reading of the policy that the insured intended the actual truth of his statement, no matter how insignificant or remote from the risk, to be a condition precedent to a binding contract, the untruthfulness of the statement, however minor or innocent, void the policy. The burden of proof was always on the insurer to show that the answer constituted a Warranty, but when the policy language left no reasonable doubt as to the parties’ intent, courts did not hesitate to refuse a recovery where the untruthfulness of any such statement was demonstrated. 

The answers were taken as Representations if the language of the policy did not clearly indicate the intention of the parties in this regard, but there was some doubt as to whether the validity of the policy depended on the truth of the answers in the application. In this case, the policy was voided only when a false statement was made as to a material matter and with the intent to defraud the insurer. By statute, virtually every state has now abolished this divide in common law. According to the legislatures, acting on the basis of what they considered to be public policy considerations, it was thought necessary to establish the conditions under which payment may be avoided despite the plain provisions of the contract.


A Representation is a statement made by the proposer to the insurer in relation to a risk that is being considered. In many cases, Representations are answers to questions that relate to questions about whether or not the applicant is insurable, as well as how much should be charged. Both material and immaterial facts may be found in a Representation. A Warranty, on the other hand as stated above, is an assurance given by the insured that he will or will not do something, that certain criteria will be met, or that he affirms or denies the existence of a certain state of events. Statements made to entice a party to engage into a contract are typically referred to as Representations, whereas those meant to be incorporated into the contract itself are referred to as warranties. 

The insurance contract would be voidable or void ab initio if there was any false statement about a material fact (with or without the intention to deceive). This also applies where the insurer placed reliance on the Representation (if the truth had been known, the insurer would have refused to offer the insurance or would have issued it with different terms, most likely with higher rates). There is also the matter of whether the Misrepresentation increases the risk and causation.

As stated above, in some instances, the insurance company, on the other hand, cannot dismiss a claim for false Representation unless it can show that the applicant lied with the intent to deceive the company, not because the applicant simply voiced an opinion that later proved to be untrue. Any Misrepresentations made after a loss might also result in the cancellation of an insurance arrangement e. g when an insured loses property, but files a claim for considerably more than the property is truly worth, or claiming that property was damaged when it was not; which is a classic form of deception. 

When it comes to causation, in these types of situations, insureds frequently assert that there is no connection between the actual loss and the Misrepresentation made on the application and that, as a result, the claim should be paid. A causal connection between the Misrepresentation and the loss is not required for the insurer to exercise the rescission remedy in some jurisdictions. The question of whether the Misrepresentation was related to the loss is not one that can be actioned., it is important to determine whether the Misrepresentation is related to the risk assumed by the insurer. 

Warranties vs Representations

The insurance contract would be affected differently if there was a breach of either Warranty vs if there was a breach of Representation. It is therefore important to know the differences.  The general distinction are:

  • A Representation must be essentially true, which means that the material element of the statement must be literally accurate, even if the immaterial portion of the statement does not have to be true or correct. A Warranty, on the other hand, must be strictly and literally followed.
  • In terms of Representation, if the insurers seek to avoid the contract due to Misrepresentation, they must show that the Misrepresentation is related to a material fact. In the case of a Warranty, however, any breach, whether major or immaterial, is sufficient for the insurers to terminate the contract.
  • Unlike a Representation, a Warranty must appear in the policy, either expressly or by reference. 

Insurance contracts impose an obligation of utmost good faith on all parties, which must be upheld at all times. For example, the insured expects a fair examination and prompt reimbursement of legitimate claims from his or her insurance company. A violation of this requirement on the side of the insurer may subject the insurer to costly bad faith litigation and punitive damages issued by a judge or a jury in addition to the damages already awarded. There is also a breach of the insured’s obligation of utmost good faith on the part of the insurance company. Material Misrepresentations made on the application for insurance or during the claims processing process are an example of breach of the insured’s obligation of utmost good faith towards the insurance company.

It is stated in the Yale Law Journal, Vol. XX MAY, 1911 No. 7 by William R. Vance, Ph.D., LL.B., Professor of Law, Yale University that;

“ In the United States, the reign of the technical Warranty is almost over. For over a century it has been con-demned by courts and text writers as an instrument of oppression and unfair dealing, and this sentence of condemnation is now being rapidly executed in the several states by the enactment of statutes wholly abolishing it as a rule of law. Even in those states, now relatively few, in which it has not been specifically abolished by statute, the Warranty has been deserted even by its only friends, the underwriters. It is seldom that one now finds a trace of the Warranty in the policies of reputable life insurance companies; and in the standard fire policy, now almost universally in use, warranties have been confined to a small and relatively un-objectionable field. These statutes generally provide, with more or less of precision and success, that warranties shall be construed as Representations, and that no Misrepresentations unless material or fraudulent shall prevent recovery on an insurance policy.” The prevalence of these statutes justifies the conclusion that in the opinion of the legal pro-fession the Warranty in insurance law is now a mistake, and that it should be transformed into the Representation.”

It has been criticized that the inequity of this type of legislation is that intentionally falsifying every question in the application does not exclude the beneficiary from recovering if none of the fraudulent answers pertain to the real source of the loss. Moreover, according to state law in most jurisdictions, failure by an insurance company to attach a copy of the application to the policy bars an insurance company from raising an insurance claim on the basis of an incorrect statement included therein. This statutory condition is severely enforced, and failure to attach the application is a complete answer to a defense of breach of Warranty in the event that the application is not attached. 

From the foregoing, you can deduce that there is an issue herein of whether or not a given statement is accurate and, if it is, how that affects the contract’s validity. However, it is clear that an insurer’s decision to provide a policy is heavily influenced by the truthfulness of the claims made by the applicant. Many people intending to purchase insurance don’t have a bargaining power over the policy unless those that have already been written, courts therefore mostly interpret insurance contracts in the way that most favors the insured especially where the contract may be interpreted in various ways. (Aschenbrenner v. United States Fid. & Guar. Co., 292 U.S. 80 (1934); Stipcich v. Metropolitan Life Ins. Co., 277 U.S. 311 (1928); Thompson v. Phenix Ins. Co., 136 U.S. 287 (1890). This is usually invoked if e.g., an insurance company is to argue that an insured’s behavior has breached the terms of his policy, through among others breach of Warranty, which would release the insurance company from any duty to pay that insured’s claim. In interpreting warranties, the court may invoke the doctrine of substantial compliance and other construction rules such as the rule requiring that warranties be construed as promissory rather than continuing.

Rescission: In the event of a rescission, the law governing an insurer’s recourse varies from state to state. Thus, it is possible that a case with similar facts in various states may be handled differently. Case in point, certain jurisdictions do require an insurer to demonstrate an intent to deceive in order to file a rescission action while other states do not have such a requirement. Historically, however, the presence of fraud or fraudulent intent was not a prerequisite criterion for the revocation of an insurance policy. Because of the severe consequences of policy cancellation, it is permitted primarily as a tool to limit the incidence of insurance fraud in the first place.

Early common law developed with policy declarations by the insured being treated as warranties, which meant that any inaccuracy, regardless of how minor, was considered a breach of Warranty by the insurer. Because of concerns about insurers’ ability to employ the law of Warranty to undertake post-loss underwriting, the majority of states held that insureds’ statements on a policy application should be read as Representations on the policy application. This meant that the insurer would have to demonstrate materiality before being able to invoke the rescission remedy.

In some lines of insurance, additional restrictions on the insurer’s ability to withdraw a policy may be in place as well. To give an example, in life insurance, it is usual to see incontestable clauses that limit the insurer’s ability to activate rescinding provisions to two years from the date of policy initiation. Even after two years, certain jurisdictions will enable rescinding a life insurance policy, but only if an intent to deceive can be demonstrated. Some jurisdictions impose further constraints on the insurer’s ability to employ policy rescinding when material Misrepresentations are discovered during the claims process, as opposed to when they are discovered during the application process. 

Ingram (2005) identifies four alternative interpretations of state legislation that determine when insurers are justified in exercising policy rescinding as a remedy in certain circumstances as follows: Presence of any material Misrepresentation, a material Misrepresentation or an intention to deceive, intention to deceive or a rise in the likelihood of loss, and materiality and an intention to deceive.

Summary judgment: Summary judgment motions are often filed in matters of voiding an issued policy because of an alleged material Misrepresentation on the part of the insured. Summary judgment may be utilized in situations where there are no disputed facts and only legal problems remain. 

In most cases, the materiality of a Misrepresentation is an issue of fact that must be resolved by a judge or jury during a court proceeding. The determination of whether a Misrepresentation is a matter of law or a matter of fact may be scrutinized and reversed on appeal (Omni Insurance Group v. Poage, Court of Appeals of Indiana, 2012, No. 92A03-1105-CT-208), The general notion is that insurers should avoid jury trail. “As all defense counsel know, when a trier of fact gets an opportunity to review almost any matter relating to insurers and their claims handling, the insurer will generally not prevail.” Ables (2007)

The fact that a lawsuit was disposed of by summary judgment does not necessarily suggest that the insurer has succeeded. Sometimes, where material Misrepresentations are alleged, the courts find in favor of the insured on summary judgment (Golden Rule Insurance Company v. R.S., Court of Appeals of Missouri, Western District, 2012, No. WD 72578).

Waiver and Estopel: The issue of waiver is also significant, and it arises whenever the circumstances surrounding or following the misstatement are such that the insurer is prevented from submitting a false statement in the application. The knowledge of a Misrepresentation on the part of the insurer or its representative is the most common basis for estoppel. This is evidenced in the case of Wylie v. U. S. Health & Accident Ins. Co., 82 S. E. 402 (S. Car.), where despite the fact that the agent was aware of the applicant’s prior insurance coverage, he told him that “it made no difference.” and in the case of Bucknam v. Interstate Bus. Men’s Ace. Assn., 167 N. W. 594 (Iowa), where the insured listed his occupation as “cashier in freight office,” whereas the insurer’s agent was aware that his duties included the inspection of freight cars in railroad yards, and it was determined that the insurer could not maintain breach of Warranty. 

When an insurer discovers that a material Misrepresentation has been made, there has been some litigation to determine whether there is a time limit on the insurer’s ability to exercise its rescission remedy. It has been asserted that because an insurer uncovered a material Misrepresentation but didn’t immediately revoke the policy, the insurer implicitly relinquished its ability to seek policy rescission, by allowing the Misrepresentation to continue without penalty. Thus, in this case, the policy is voidable, but it is not void from the outset/ void ab initio as in rescission matters.

The doctrine of estoppel may be invoked by a court to limit an insurer’s ability to rescind a policy.

If a party has a reasonable basis for relying on another party’s promises, this legal doctrine may be invoked to prevent other party from doing activities that could lead to an unfair result. In the event of a material Misrepresentation, courts may invoke the legal doctrine of estoppel to prohibit the insurer from relying on policy rescission as a remedy. This is because insurance contracts contain promises of coverage and insureds rely on those promises. 

Sample warranties and Representations provisions from different states

Let us briefly explore some of the assertions on Warranties and Representations above as provided in the following states:


The California Insurance Code- INS, DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 – 1879.8], PART 1. THE CONTRACT [100 – 679.75], CHAPTER 4. The Policy [380 – 460] and ARTICLE 4. Warranties [440 – 449]

“A Warranty is either express or implied. A statement in a policy of a matter relating to the person or thing insured, or to the risk, as a fact, is an express Warranty thereof.  A particular form of words is not necessary to create a Warranty. Every express Warranty made at or before the execution of a policy shall be contained in the policy itself, or in another instrument signed by the insured and referred to in the policy, as making a part of it. A Warranty may relate to the past, the present, the future, or to any or all of these. A statement in a policy, which imports that there is an intention to do or not to do a thing which materially affects the risk, is a Warranty that such act or omission will take place. When, before the time arrives for the performance of a Warranty relating to the future, a loss insured against happens, or performance becomes unlawful at the place of the contract, or impossible, the omission to fulfill the Warranty does not avoid the policy. The violation of a material Warranty or other material provision of a policy, on the part of either party thereto, entitles the other to rescind. Unless the policy declares that a violation of specified provisions thereof shall avoid it, the breach of an immaterial provision does not avoid the policy. A breach of Warranty without fraud merely exonerates an insurer from the time that it occurs, or where the Warranty is broken in its inception, prevents the policy from attaching to the risk.”

Under the Code; DIVISION 2. CLASSES OF INSURANCE [1880 – 12880.6], PART 1. FIRE AND MARINE INSURANCE [1880 – 10108.1], CHAPTER 1. The Marine Contract [1880 – 2010] and ARTICLE 3. Implied Warranties Peculiar to Marine Insurance [1920 – 1927]

“In every marine insurance upon a ship or involving transportation by ship, a Warranty is implied that the ship is seaworthy. A ship is seaworthy when reasonably fit to perform the services and encounter the ordinary perils of the voyage contemplated by the parties to the policy. An implied Warranty of seaworthiness is complied with if the ship is seaworthy at the time of the commencement of the risk, except in the following cases:

(a) When the insurance is made for a specified length of time, the implied Warranty is not complied with unless the ship is seaworthy at the commencement of every voyage it undertakes during that time.

(b) When the insurance is upon the cargo and, by the terms of the policy, description of the voyage, or established custom of the trade, the cargo is to be transshipped at an intermediate port, the implied Warranty is not complied with unless each vessel upon which the cargo is shipped or transshipped is seaworthy at the commencement of its particular voyage.

A Warranty of seaworthiness extends not only to the condition of the structure of the ship itself, but also requires that it be properly laden and provided with:

(a) A competent master.

(b) A sufficient number of competent officers and seamen.

(c) The requisite appurtenances and equipments.

(d) Other necessary or proper stores and implements for the voyage.

Where any portion of the voyage contemplated by a policy differs from other portions in respect to the things requisite to make the ship seaworthy therefor, a Warranty of seaworthiness is complied with if, at the commencement of each portion, the ship is seaworthy with reference to that portion. When a ship becomes unseaworthy during the voyage, an unreasonable delay in repairing the defect exonerates the insurer from liability on any loss arising from the defect.  A ship may be seaworthy for the purpose of insurance upon itself and, at the same time, unseaworthy for the purpose of insurance upon the cargo because of unfitness to receive the cargo. 

Where the nationality or neutrality of a ship or cargo is expressly warranted, it is implied that:

(a) The ship will carry the requisite documents to show such nationality or neutrality.

(b) It will not carry any documents which cast reasonable suspicion thereon.”

New York

Under New York law, ISC – Insurance, Article 31 – (Insurance) INSURANCE CONTRACTS – GENERAL, 3106 – Warranty defined; effect of breach.

“(a) In this section “Warranty” means any provision of an insurance contract which has the effect of requiring, as a condition precedent of the taking effect of such contract or as a condition precedent of the insurer’s liability thereunder, the existence of a fact which tends to diminish, or the non-existence of a fact which tends to increase, the risk of the occurrence of any loss, damage, or injury within the coverage of the contract.  The term “occurrence of loss, damage, or injury” includes the occurrence of death, disability, injury, or any other contingency insured against, and the term “risk” includes both physical and moral hazards.

(b) A breach of Warranty shall not avoid an insurance contract or defeat recovery thereunder unless such breach materially increases the risk of loss, damage or injury within the coverage of the contract.  If the insurance contract specified two or more distinct kinds of loss, damage or injury which are within its coverage, a breach of Warranty shall not avoid such contract or defeat recovery thereunder with respect to any kind or kinds of loss, damage or injury other than the kind or kinds to which such Warranty relates and the risk of which is materially increased by the breach of such Warranty.” 

An exception to the above provision is a marine insurance contract’s express or implied warranties regarding any and all risks or perils of navigation, transit or transportation, including war risks, on, over, or under any seas and inland waters and any provision in an insurance contract requiring notification, proof, or other conduct from the insured following the occurrence of loss, damage, or injury. 


In Missouri, Title XXIV – Business and Financial Institutions, Chapter 379 – Insurance Other Than Life. Section 379.165 Construction of warranties of fact made in application.

The Warranty of any fact or condition hereafter made by any person in his or her application for insurance against loss by fire, tornado or cyclone, which application, or any part thereof, shall thereafter be made a part of a policy of insurance, by being attached thereto, or by being referred to therein, or by being incorporated in such policy, shall, if not material to the risk insured against, be deemed, held and construed as Representations only, in any suit brought at law or in equity in any of the courts of this state, upon such policy to enforce payment thereof, on account of loss of or damage to any property insured by such policy.”


The replies of the applicant shall be considered as Misrepresentation unless they are made fraudulently with the intent to deceive the insurer on an issue that would have barred the issuing of the policy had the insurer been aware of the facts, or that affects the risk being insured according to Louisiana law. In Louisiana Laws, TITLE 22 — Insurance, RS 22:860 — Warranties and Misrepresentations in negotiation; applications and RS 22:1314 — Breach of warranties and conditions of fire policies and applications therefor, state as follows;

§860. Warranties and Misrepresentations in negotiation; applications

“A. Except as provided in Subsection B of this Section, R.S. 22:1314, and 1315, no oral or written Misrepresentation or Warranty made in the negotiation of an insurance contract, by the insured or in his behalf, shall be deemed material or defeat or void the contract or prevent it attaching, unless the Misrepresentation or Warranty is made with the intent to deceive.

B. In any application for life, annuity, or health and accident insurance made in writing by the insured, all statements therein made by the insured shall, in the absence of fraud, be deemed Representations and not warranties. The falsity of any such statement shall not bar the right to recovery under the contract unless either one of the following is true as to the applicant’s statement:

(1) The false statement was made with actual intent to deceive.

(2) The false statement materially affected either the acceptance of the risk or the hazard assumed by the insurer under the policy.”

In Louisiana Laws, TITLE 22 — Insurance, RS 22:1314 — Breach of warranties and conditions of fire policies and applications therefor

§1314. Breach of warranties and conditions of fire policies and applications therefor

“A. No policy of fire insurance issued by any insurer on property in this state shall hereafter be declared void by the insurer for the breach of any Representation, Warranty, or condition contained in such policy or in the application therefor. Such breach shall not allow the insurer to avoid liability unless such breach: (1) exists at the time of the loss, and be such a breach as would increase either the moral or physical hazard under the policy; or (2) shall be such a breach as would be a violation of a Warranty or condition requiring the insurer to take and keep inventories and books showing a record of his business.

B. Notwithstanding the provisions of Subsection A of this Section, such a breach shall not afford a defense to a suit on the policy if the facts constituting such a breach existing at the time of the issuance of the policy and were, at such time, known to the insurer or to any of his or its officers or agents, or if the facts constituting such a breach existed at the time of the loss and were, at such time, known to the insurer or to any of his or its officers or agents, except in case of fraud on the part of such officer or agent or the insured, or collusion between such officer or agent and the insured.”


Under Florida Insurance laws, 627.409- Representations in applications; warranties. —

“(1) Any statement or description made by or on behalf of an insured or annuitant in an application for an insurance policy or annuity contract, or in negotiations for a policy or contract, is a Representation and not a Warranty…a Misrepresentation, omission, concealment of fact, or incorrect statement may prevent recovery under the contract or policy only if any of the following apply:

(a) The Misrepresentation, omission, concealment, or statement is fraudulent or is material to the acceptance of the risk or to the hazard assumed by the insurer.

(b) If the true facts had been known to the insurer pursuant to a policy requirement or other requirement, the insurer in good faith would not have issued the policy or contract, would not have issued it at the same premium rate, would not have issued a policy or contract in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss.

(2) A breach or violation by the insured of a Warranty, condition, or provision of a wet marine or transportation insurance policy, contract of insurance, endorsement, or application does not void the policy or contract, or constitute a defense to a loss thereon, unless such breach or violation increased the hazard by any means within the control of the insured.”

The exception to the above provision is that “For residential property insurance, if a policy or contract has been in effect for more than 90 days, a claim filed by the insured cannot be denied based on credit information available in public records.”


Under Arizona law, Insurance § 20-1109. Statements as Representation; effect of Misrepresentation upon policy

“All statements and descriptions in any application for an insurance policy or in negotiations therefor, by or in behalf of the insured, shall be deemed to be Representations and not warranties. Misrepresentations, omissions, concealment of facts and incorrect statements shall not prevent a recovery under the policy unless:

1. Fraudulent.

2. Material either to the acceptance of the risk, or to the hazard assumed by the insurer.

3. The insurer in good faith would either not have issued the policy, or would not have issued a policy in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss, if the true facts had been made known to the insurer as required either by the application for the policy or otherwise.” 

In 20-1205. Application and policy as entire contract; statements in application as Representations; information states “A. There shall be a provision that the policy, or the policy and the application therefor if a copy of the application is endorsed upon or attached to the policy when issued, shall constitute the entire contract between the parties, and that all statements contained in the application shall, in the absence of fraud, be deemed Representations and not warranties.”


In Alaska, under AS 21.42.110. Representations in Applications.

“All statements and descriptions in an application for an insurance policy or annuity contract, or in negotiations for the policy or contract, by or in behalf of the insured or annuitant, shall be considered to be Representations and not warranties. Misrepresentations, omissions, concealment of facts, and incorrect statements may not prevent a recovery under the policy or contract unless either

(1) fraudulent;

(2) material either to the acceptance of the risk, or to the hazard assumed by the insurer; or

(3) the insurer in good faith would either not have issued the policy or contract, or would not have issued a policy or contract in as large an amount, or at the same premium or rate, or would not have provided coverage with respect to the hazard resulting in the loss, if the true facts had been made known to the insurer as required either by the application for the policy or contract or otherwise.”

Further under, § 21.54.010., a group health insurance policy must contain among others “a provision that, in the absence of fraud, all statements made by applicants or the policyholder or by an insured person shall be considered Representations and not warranties, and that a statement made for the purpose of effecting insurance may not void the insurance or reduce benefits unless contained in a written instrument signed by the policyholder or the insured person, a copy of which has been furnished to the policyholder or to the insured person or the beneficiary of the insured person;”


In the Delaware insurance code, § 2711. Representations in applications.

“All statements and descriptions in any application for an insurance policy or annuity contract by or in behalf of the insured or annuitant shall be deemed to be Representations and not warranties. Misrepresentations, omissions, concealment of facts and incorrect statements shall not prevent a recovery under the policy or contract unless either:

(1) Fraudulent; or

(2) Material either to the acceptance of the risk or to the hazard assumed by the insurer; or

(3) The insurer in good faith would either not have issued the policy or contract, or would not have issued it at the same premium rate or would not have issued a policy or contract in as large an amount or would not have provided coverage with respect to the hazard resulting in the loss if the true facts had been made known to the insurer as required either by the application for the policy or contract or otherwise.”


Under its insurance law, “41-1811.  Representations in applications. All statements and descriptions in any application for an insurance policy or annuity contract, or in negotiations therefor, by or in behalf of the insured or annuitant, shall be deemed to be Representations and not warranties. Misrepresentations, omissions, concealment of facts, and incorrect statements shall not prevent a recovery under the policy or contract unless either:

(a)  Fraudulent; or

(b)  Material either to the acceptance of the risk, or to the hazard assumed by the insurer; or

(c)  The insurer in good faith would either not have issued the policy or contract, or would not have issued it at the same premium rate, or would not have issued a policy or contract in as large an amount, or would not have provided coverage with respect to the hazard resulting in the loss, if the true facts had been made known to the insurer as required either by the application for the policy or contract or otherwise.”


Texas law also has Representation versus Warranty distinction. If the statements are Representations, the insurance company must plead and show: the creation of the Representation; the untruthfulness of the Representation; the insurance company’s reliance on the Representation; the insured’s intent to deceive in making the same; and the materiality of the Representation to avoid liability under the policy. There is also recognition that if the policy text specifically states that coverage will not begin unless the applicant is in good health, the clause will be enforced as a condition precedent. When the language in the application claims that the responses are true and correct at the moment the policy is delivered, this is only a Representation. When an insurance policy’s language is open to several interpretations, the policy should be read in favor of the insured to prevent coverage exclusion.In the United States Fifth Circuit, “a Warranty is a statement made by the insured, which is susceptible to no construction other than that the parties mutually intended that the policy should not be binding unless such statement be literally true…Warranties in insurance applications are strongly disfavored in the law, and even fairly obvious attempt to create warranties in the application process have been rejected by Texas Courts.”

Case laws 

Please take the time to explore the below cited case laws that emphasize the Warranty vs. Representations issue in insurance statements to gain a better understanding of the matter and how it has evolved.

In Peterson vs. Independent Order of Foresters, 162 Wis. 562, The assured represented that he had incurred no harm and had not sought medical attention in five years, and the court held that, “The Representations made by the assured in his application to the effect that he had suffered no injury and had no medical attendance within five years, were not only warranties but they were necessarily material to the risk. They are shown by the proof of death to have been not only nominally but substantially false, and this fact avoids the policy.”

In Houghton v. Manufacturer’s Mut. Fire Ins., 49 Mass. 114, 122 (1844), the court stated 

“By a substantial compliance, we mean the adoption of precautions, if not exactly those stated in the application, precautions intended to accomplish the same purpose, and which may be reasonably considered equally or more efficacious. For instance, when it is stated that ashes are taken up in iron hods, it would be a substantial compliance, if brass or copper were substituted. So, when it is represented that casks of water, with buckets, are kept in each story, if a reservoir were placed above, with pipes to convey water to each story, and found by skillful experienced persons to be equally efficacious, it would be a substantial compliance.”

The effect of a Warranty was stated in In Burritt v. Insurance Co., 5 Hill (N. Y.), I93, 40 Am. Dec., 345.  as “A Warranty by the assured in relation to the existence of a particular fact must be strictly true, or the policy will not take effect; and this is so whether the thing warranted be material to the risk or not. It would, per-haps, be more proper to say, that the parties have agreed on the materiality of the thing warranted, and that the agreement pre-cludes all inquiry on the subject.”

As held in In Harms v. Fidelity Ins. Co., 57 S. W. 1046., a deception as to the insured’s habits of sobriety does not prohibit recovery under the policy in Missouri unless the insured’s lack of sobriety is the cause or contributes to the cause of the loss suffered under the policy, as determined by the court.

In Olsson v. Midland Ins. Co., 165 N. W. 474., A decision was reached that claims made by an insured that he had never suffered from fits or hernia or that he had never obtained surgical attention within five years are material. 

According to the plaintiff beneficiaries of a life insurance policy, the defendant insurance company sought avoidance of the policy on grounds that the deceased had provided false and fraudulent answers to questions asked by the examining physician. The plaintiff beneficiaries were successful in their claim. These responses had been documented on an application form, which had become a part of the policy. The evidence established that the defendant’s responses regarding a heart condition and trips to a physician were fake, and the trial court entered a verdict in the Defendant’s favor. On appeal, the decision was upheld stating that because the insured’s answers on the application form were incorrect and material, the insurer may decide to reject the insurance application and deny the claim. (Flint v. Prudential Ins. Co., 70 So.2d 161 (La. App. 1954).

In the case of Vivar vs.Supreme Lodge, 52 N. J. Law 455, 20 AtI. 836, the Court stated as follows: “If the Representation made, though known by the insured to be false, did not differ from the truth in any respect which was, either in fact or in the view of the insurer, material to the contract, then the falsehood did not mislead the insurer or induce the contract, and should not be allowed to avoid it. Usually the materiality of a Representation will be inferred from the fact that it was made pending the negotiations, in response to a specific inquiry by the insurer; but this rule is not universal, for the purpose of the inquiry must be considered, to see whether the information is sought to aid the insurer in fixing the terms on which he will contract, or with an entirely different object. Thus, if a mutual insurance company should require its premiums to be paid within a definite time after the mailing of notice addressed to the residence of the insured, and, with this rule in view, should require every applicant for insurance to state his residence in his application, and an applicant should give as his residence not the truth, but the place where he ordinarily received his mail, it would seem absurd to hold that such circumstance would invalidate the contract.”

A question on the homeowners policy application in the case of Bowens v. Nationwide Insurance Company, U.S. District Court, N.D. Mississippi, Eastern Division, No. 1:10CV310-B-S. questioned if any of the household members had been convicted of a felony within the previous ten years. The insured said “no” and signed the blank, attesting that all information provided in the application was truthful and accurate, but he had actually been convicted of a felony and had served time in prison within the time frame stipulated in the policy documents. When a major fire loss happened, and after an examination into the assertions made in the application, the insurer refused the claim and claimed its rescission rights because of material Misrepresentation. The misstatement was determined to be material because Nationwide’s underwriting guidelines expressly specified that individuals with felony convictions within the last ten years are not eligible for coverage. Despite a contest from the insured, the insurer was successful on summary judgment. 

Williams v. American Western Home Insurance Company, U.S. District Court, E.D. Michigan, Southern Division, No. 11-10963, in which the insured asserted that all cooking surfaces were protected by fire suppression devices and that there were no current fire code breaches. There has been considerable fire damage and an investigation conducted after the loss revealed that the open flame that started the fire emanated from a cooking surface that was not protected by a fire suppression system, and that the insured had previously been cited for a fire code contravention that was still unchecked at the time of the loss. As a result, the insurer denied the claim, and the court found on summary judgment that the contract was void ab initio as a result of the presence of a material Misrepresentation in the application for the contract. 

In the case of Omni Insurance Group v. Poage, Court of Appeals of Indiana, 2012, No. 92A03-1105-CT-208, two parents shared joint custody of their son, who lived in their two places. The son was named as an insured on the father’s motor insurance policy, but he was not named as an insured on the mother’s policy. An accident occurred while the boy was behind the wheel of his mother’s vehicle. The mother had indicated that there were no inhabitants of the family who were not revealed. It’s important to note that the mother’s policy did not provide coverage for any residents who were not included on the policy’s declaration page. The claim was denied by the insurer because of the Misrepresentation. On the basis of summary judgment, the district court found in favor of the insured. The insured appealed, according to the appeals court, summary judgment was not appropriate in a case where material facts were in dispute. It was held that there was a legitimate dispute as to whether the boy could be deemed a resident of the mother; if this was the case, the rescission remedy might be suitable and permissible in that instance. if not, then it would be reasonable to believe that the insurance policy would cover the incident because the son was driving the automobile with the mother’s permission.

Golden Rule Insurance Company v. R.S., Court of Appeals of Missouri, Western District, 2012, No. WD 72578; when R.S. filed a lawsuit against Golden Rule Insurance Company, the court found that the insureds had applied for and received many health insurance policies from different insurance firms, paying premiums on each policy and filing multiple claims for the same expenses as they occurred. One insurer objected to this activity on the grounds of significant Misrepresentation, citing the fact that different insurance companies were issued with different mailing addresses. The insureds argued that they maintained multiple dwellings by frequently staying at a friend’s property in a different state, and that this did not qualify as a Misrepresentation under the policy terms and conditions. On appeal, the judges agreed with the insureds’ position, and the insurer was unsuccessful on these grounds. Another interested insurer objected to the several payments made under the other insurance provision contained in the insurance contract. The insurer was successful in having the declaratory decision remanded to the trial court for additional consideration of the issue.  

 In Mountain City Ford, LLC v. Owners Insurance Company, Court of Appeals of Kentucky, 2011, No. 2009-CA-002233-MR., an employee who did not have a driver’s license was responsible for an accident in which the injured parties were awarded well over $1 million in damages. Although the at-fault employee was not named as a driver on the application, the premiums were calculated on the basis of the payroll of drivers, and the compensation for this particular employee was included in the total. As a result, the insured contended that the insurer had taken a premium in exchange for covering this driver. The insurance responded by stating that their policies did not enable them to cover an unlicensed driver, and that if they had known, they would not have issued the coverage in the first instance. When it came to the trial court level, the matter was decided in the insurer’s favor. 

The verdict was upheld on appeal, albeit various additional points were raised and addressed as part of the decision. For example, the insured filed a motion for a judgment despite the jury’s finding, citing the abnormally tight relationship between the insurance agency and the employer, which bolstered the insured’s case that the insurer should have been aware of the true nature of the circumstances. In addition, the insured claimed that the jury instructions given by the trial court were incorrect. 

One firm lawyer was misappropriating client cash in State Bar Ass’n Mut. Ins. v. Coregis Ins, Appellate Court of Illinois, First District, Fourth Division, 2004, No. 1-03-2283. He stated that he was not aware of any “circumstance, act, error, omission or personal injury which may result in a claim” against him in the application when he renewed his professional liability insurance coverage with Coregis. There were counterclaims filed against a number of people as well as suits against other lawyers in the firm in this matter. The circuit court ruled that Coregis had no obligation to defend its insured because of the material Misrepresentation in the policy that rendered the policy void ab initio.

If material Misrepresentations are made, the court on appeal ruled that insurance contracts are voidable, and not void ab initio. The appeals court supported the circuit court’s decision to grant summary judgment in favor of the insurer because Coregis had informed the client that it was reserving its rights pending settlement of the dispute. As per this decision, a material Misrepresentation renders the policy voidable rather than void ab initio in Illinois and that the insurer may have waived its right to rescission if it fails to act immediately after discovering a material Misrepresentation. 

The case of American Service Ins. v. United Auto Ins., Appellate Court of Illinois, First District, First Division, 2011, No. 1-09-3070, a juvenile child had recently earned a driver’s permit but had not been named on the auto insurance application as a “operator” of the vehicle. He was the cause of an accident that merely resulted in property damage. During the course of the investigation, the insurer discovered a “coverage issue,” but as it appeared that it did not communicate this to the insured. The insured continued to pay premiums despite the fact that the youngster was not classified as a driver, and the insurer accepted those premium payments as well. A little more than seven months later, the child was involved in another accident. 

The insurer rescinded the policy as of a date that was effective prior to the first accident and issued a refund to the insured for the premiums that had been paid. The trial court upheld United’s position and allowed the company’s policy rescinding decision to stand on summary judgment. On appeal, the question of whether United had relinquished its rescinding rights was challenged, given that there had been two accidents involving the unlisted child and that a significant amount of time had elapsed between the two incidents. It was determined by the Illinois Court of Appeals that the trial court acted correctly in granting a policy rescission on summary judgment in this instance since the one-year time restriction set forth in Section 154 of the Illinois Code had not been surpassed. 

Graphic Arts Mutual Insurance Company v. Pritchett, 469 S.E.2d 199 (Ga. Ct.App. 1995)., The insured was asked if any previous insurance applications had been terminated. In fact, a prior application with the insurer’s corporate parent had been terminated, as well as several others, prior to this. The insured provided a false response of “no.” Ultimately, the court determined that the insurance was barred from exercising the rescission remedy in this case, reasoning that the insurer’s prior transactions with the insured should have alerted it to the previous termination. 

In the case of Nationwide v. Nelson, U.S. District Court, Eastern District of Kentucky, 2012, No. 11-32-ART., the insured had been convicted of a felony but had falsely said on the application that he had not been convicted. In their defense, the defendants claimed that there was no purposeful attempt to deceive the insurer; nonetheless, the court determined that intentional Misrepresentation is not required to void a policy from the outset/ void ab initio. As the court observed, “When it comes to insurance applications, Kentucky law makes no distinction between honest mistakes and intentional lies.”

Rutgers Casualty Insurance Company was sued by Kiss Construction NY, Inc. (a company that claimed its nature of business as 100 percent interior painting) in a case that occurred in New Jersey. Later, when the company served as general contractor in the construction of a three-family structure, a number of injuries happened. Due to the fact that the real operation of the firm included excavation and paving in addition to painting, Rutgers sought to have the policy declared void from the beginning/ void ab initio. The court noted an earlier decision, Dwyer v. First Unum, which demonstrated that the insured’s intent to deceive can be proven as a matter of law if the insured understands that certain facts are material to its risk and decides to omit them from the application for insurance coverage. In this case, the appeals court found that the policy was void ab initio since the firm had been engaged in similar construction work for some time prior to this particular insurance application without reporting this fact, and thus the insurance company could avoid defending or paying on the claim, but the insurer was also required to refund premiums to the insured. (Kiss Construction NY, Inc. v. Rutgers Casualty Insurance Company Appellate Division of the Supreme Court of New York, First Department, 2009,877 N.Y.S.2d 253.)

In the case of Childers v. State Farm Fire and Cas., Missouri Court of Appeals, 1990, 799 S.W.2d 138., a fire destroyed the insureds’ home and all of their belongings. In the course of its inquiry, the insurance learned that many of the goods mentioned on the first inventory of losses had not been damaged, and the claim was rejected. The district court determined that the insurer was merited in exercising its rescission remedy, and the appeals court agreed, ruling further that Misrepresentations by one insured can have an adverse effect on the recovery rights of a joint insured if the intent of the Misrepresentations is to deceive the insurer.

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