A warranty in insurance contracts refers to statements that must be true at what time?

• A. At the time of application
• B. At the time of loss
• C. At policy renewal
• D. At all times since inception of the policy

Answer: (B)

Warranties are promises that certain facts stated in the contract are true, and they’re treated as conditions of the policy. The crucial point is when those statements must be true for the coverage to apply. They’re evaluated at the time a claim is made—the time of loss—because a breach can affect whether the insurer must pay the claim. If a warranty is false at the moment of loss, the insurer has a basis to deny the claim or the contract may be void in relation to that loss.

For contrast, representations are statements made during the application process. They’re facts the applicant asserts as true, and while misrepresentations can lead to denial or cancellation if material or fraudulent, warranties are tied to the loss event itself and can void coverage when breached at the time of loss.