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Question

Difficulty: EasyRepresentations, Warranties, and Concealment

When filling out an application for a personal auto policy, David is asked about the distance of his daily commute to work. He states it is 15 miles, providing this answer to the best of his knowledge and belief. Under insurance contract law, which of the following best describes David's statement?

  1. A
    A warranty
  2. A representationAnswer
  3. C
    An estoppel
  4. D
    The insurer's consideration

Answer

A representation
In insurance law, a representation is a statement made by the applicant that they believe to be true and accurate to the best of their knowledge. Because David provided his commute distance based on his best belief rather than offering an absolute guarantee, his statement legally qualifies as a representation.

Step-by-Step Solution

1
Analyze the nature of the statement provided by the applicant.
The applicant provided the commute distance 'to the best of his knowledge and belief.'
Identifying the level of certainty or guarantee attached to the applicant's statement determines its legal classification.
2
Compare the statement's characteristics against insurance contract doctrines.
A statement believed to be true but not absolutely guaranteed is defined as a representation.
This differentiates the statement from a warranty, which requires absolute literal truth.

Key Concept

Representations vs. Warranties
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Topics

Representations, Warranties, and Concealment

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