When are warranties deemed not true or violated, which is the consequence?

In the context of insurance, warranties are specific statements or promises made by the applicant that must be true for the insurance policy to be valid. If a warranty is found to be untrue or violated, it fundamentally alters the conditions under which the insurance contract was established. The consequence of such a violation is that the insurer has the right to void the coverage.

When a warranty is breached, it suggests that the risk has changed in a way that the insurer did not agree to at the time of underwriting. Therefore, the insurer can choose to void the contract altogether, meaning they have no obligation to fulfill any claims that might arise under that policy. This principle protects insurers from having to cover risks that they would not have accepted if they had accurate information initially.

Other choices do not align with the implications of a warranty violation in an insurance context. For instance, the notion of the application being considered valid contradicts the concept of a violated warranty, as an untrue warranty would invalidate the contract. Similarly, suggesting that the insurer will always pay out conflicts with the essence of a breached warranty, as does the idea that an applicant can renegotiate terms, which is not typically allowed once a warranty is violated.