Tennessee Insurance Practice Exam

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Which statement is assured to be true in every respect?

Representation
Warranty
Condition
Disclaimer

The correct answer is: Warranty

A warranty is a statement or assurance made by one party to another, which guarantees that certain facts or conditions are true as part of an agreement. In the context of insurance, a warranty is a promise that is absolutely guaranteed to be true, and if it is found to be false, it can lead to the voiding of the policy. This is a critical distinction, as warranties are often considered to hold more legal weight than representations or conditions. In contrast, a representation is a statement made by one party that induces another party to enter into a contract. These statements are not guaranteed to be true; rather, they are made in good faith. A condition is a stipulation in a contract that must be met for the contract to remain valid, but it does not guarantee truth in the same way a warranty does. Lastly, a disclaimer is a statement that limits or denies responsibility or liability, and it is not an assertion of truth regarding facts. These distinctions clarify why a warranty is the option that is assured to be true in every respect.