State RegulationsNC specificDifficulty 2/5
Under G.S. 58-3-10, statements made by an applicant in an insurance application are treated as:
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under G.S. 58-3-10, statements in an insurance application are representations, not warranties. A misrepresentation avoids the policy or the claim only if it is fraudulent or material, so an innocent or immaterial misstatement does not defeat coverage. This protects North Carolina policyholders from automatic forfeiture over technical inaccuracies.
Why the other options are wrong
- A) Application statements are not warranties; a breach does not automatically void the policy under G.S. 58-3-10.
- C) Application statements remain relevant after the first premium; misstatements that are fraudulent or material can still defeat coverage.
- D) The statute does not make statements binding admissions; the insurer must still show fraud or materiality to avoid the policy.
Memory hook
Applications hold representations, not warranties — fraud or materiality, or it stays covered.