What are warranties in the context of insurance contracts?

Warranties in the context of insurance contracts are statements that are guaranteed to be true and are specifically included as part of the contract. This means that the insured party has made a formal promise regarding certain conditions or facts. If a warranty is found to be untrue, it can provide grounds for the insurer to void the contract or deny a claim, as the warranty is viewed as a critical element upon which the insurer relies when underwriting the insurance policy.

Unlike mere representations, which are statements believed to be true at the time they are made, warranties are strictly enforceable. They are essential because they form the basis of the agreement between the insurer and the insured, affirming that certain facts or conditions exist as stipulated. This level of certainty serves to protect the insurer by providing assurances about the risk profile of the insured.

The other options, while related to aspects of insurance, do not correctly define warranties. For example, statements believed to be true capture what a representation entails but lack the binding certainty of a warranty. General conditions of the policy refer to the broader terms under which a policy operates, and guarantees of performance by the policyholder pertain to different obligations not specifically tied to the concept of warranties in insurance.