State RegulationsNC specificDifficulty 1/5
Under North Carolina insurance law, the statements an applicant makes in an insurance application are treated as:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under G.S. 58-3-10, statements in an insurance application are representations, not warranties. A misstatement avoids the policy only if it was fraudulent or material to the risk. This preserves coverage for honest, immaterial errors made on the application.
Why the other options are wrong
- A) Warranties would make every inaccuracy fatal to the policy, which the statute expressly rejects.
- B) The law does not treat application statements as absolute guarantees of accuracy.
- C) Conditions precedent requiring literal truth is the warranty approach that the statute rejects.
Memory hook
Applications hold representations, not warranties.