Question

A condition in an insurance policy or certain statements made in an application to which the policyholder is bound under penalty of the policy being declared void is called:

a) Exclusion
b) Inception
c) Warranty
d) Rider

Answer 1

A condition in an insurance policy or certain statements made in an application to which the policyholder is bound under penalty of the policy being declared void is called a warranty.

Step-by-step explanation:

A condition in an insurance policy or certain statements made in an application to which the policyholder is bound under penalty of the policy being declared void is called a warranty.

A warranty is a promise made by the policyholder to the insurance company. If the policyholder fails to comply with the conditions or statements in the policy, the insurance company can declare the policy void and refuse to provide coverage.

For example, if a policyholder fails to disclose a pre-existing medical condition in their application and it's discovered later, the insurance company can void the policy because the policyholder breached the warranty.