Florida Insurance Claims Adjuster License Practice Exam

What is a warranty in the context of an insurance policy?

1. A guarantee of a fact

2. An abandonment clause

3. Physical harm to property

4. Something that increases loss probability

The correct answer is: A guarantee of a fact

A warranty in the context of an insurance policy is a guarantee of a fact that the insured party promises to be true at the time of entering into the policy. This could include disclosing previous claims, history of the insured property, or any other relevant information that may affect the coverage or premiums of the insurance policy. Option B is incorrect because an abandonment clause is a provision that allows the insured party to give up ownership of the property or property rights to the insurer in exchange for a settlement amount. Option C is incorrect because physical harm to property does not fall under the definition of a warranty in an insurance policy. Option D is incorrect because a warranty does not increase the probability of loss, it is a condition that must be fulfilled in order for the policy to be valid.