A warranty in an insurance contract differs from a representation primarily because a warranty:

Why A is correct

A warranty is a statement or condition that becomes part of the insurance contract and must be literally true. Under California law a warranty may be express or implied, and the violation of a material warranty entitles the injured party to rescind the policy. Because a warranty is incorporated into the contract, its falsity breaches the contract itself. This is the central distinction from a representation, which is a statement made to induce the contract, is not part of the contract, and generally must merely be substantially true and material before it gives rise to rescission.

Why the other options are wrong

• B) The 'substantially true' and pre-contract description applies to representations, not warranties; warranties must be strictly true and become part of the contract.
• C) Warranties are typically made by the insured about the risk; the insurer does not make warranties about the insured's conduct.
• D) A warranty may be either express or implied, so saying it cannot be either is incorrect.

Memory hook

Warranty = part of the contract, must be literally true. Representation = pre-contract talk, must be substantially true.

Why D is correct

A warranty is an undertaking that certain facts exist or will continue to exist, and it is either express or implied under CIC Section 440. Violation of a material warranty or other material provision of a policy entitles the other party to rescind under CIC Section 447. Warranties must be literally true, in contrast to representations, which need only be substantially true. In life insurance, however, Section 10113 provides that statements made by the insured are, in the absence of fraud, representations rather than warranties, which protects insureds from the strict literal-truth standard that applies to warranties.

Why the other options are wrong

• B) Substantial truth is the standard applied to representations. A warranty must be literally true, so the two standards differ significantly. This statement does not survive the statutory analysis presented above and is therefore wrong.
• C) An opinion is a matter of the applicant's belief or personal judgment, not an assurance that a fact exists. Warranties concern facts, not opinions. The correct answer follows from the controlling authority, which this option does not follow.
• A) A warranty is an assurance of fact made by one party, not a request directed to the insurer. It defines the risk rather than asking for action. This common misconception is exactly what the governing rule rejects, so the option is incorrect.

Memory hook

Warranty = warrant, literally true, breach rescinds. In life insurance, statements are representations unless fraud shows.