State RegulationsNC specificDifficulty 2/5
An applicant for a North Carolina accident and health policy gives answers about her medical history in the application. Under G.S. 58-3-10, those statements are treated as:
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Answer & full 3-part explanation (select an option above, or peek)
Why A 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 protects North Carolina insureds from technical, immaterial inaccuracies while preserving the insurer's remedy for genuinely misleading answers on the application.
Why the other options are wrong
- B) The warranty characterization is exactly what G.S. 58-3-10 rejects; an immaterial or innocent inaccuracy does not void coverage.
- C) The statute creates no guarantee of issuance; the insurer still underwrites the application and may decline the risk.
- D) The Insurance Information and Privacy Protection Act (G.S. 58-39-5 through 58-39-120) governs handling of personal information but does not bar insurers from using application answers in underwriting.
Memory hook
Applications are representations, not warranties - fraud or materiality voids, nothing less.