What can an insurance company guarantee by using warranties in an application?

The correct answer is that warranties in an application allow an insurance company to guarantee that certain facts are true and correct. Warranties are specific statements or promises made by the applicant regarding the condition or circumstances of the insured property or risks involved. When an applicant provides a warranty, it serves as a binding assurance that the stated facts are accurate. If it is later determined that the warranty is untrue, the insurer may have grounds to deny coverage or void the policy.

This is crucial for the insurer as it helps to assess the risk accurately and price the policy appropriately based on the information provided. By establishing certain facts as warranties, insurers protect themselves against misrepresentation or inaccuracies that could impact their liability.

Complete confidentiality of information, that all information will remain unchanged, and that claims will be paid without question do not accurately reflect the nature of what warranties guarantee. Warranties focus primarily on the truthfulness of the facts presented rather than confidentiality, immutability of information, or the assurance of claims payment.