What consequence follows if a warranty in an insurance contract is violated?

When a warranty in an insurance contract is violated, the significant consequence is that the other party can cancel the contract. Warranties are specific promises that certain facts or conditions relating to the insurance policy will remain true throughout the life of the policy. If a warranty is breached, it means that the insurer can terminate the contract because warranties are considered integral to the agreement. This principle ensures that both parties adhere to the contractual terms, maintaining the integrity of the risk assessment that the insurer has made based on the warranty provided.

In understanding this consequence, it is essential to recognize the nature of warranties versus representations. Warranties are strict conditions, while representations are generally statements that may not necessarily invalidate the contract unless they can be shown to mislead the insurer significantly. Since warranties carry such weight, their violation can lead to the cancellation of the contract, underlining the commitment and reliability expected in insurance agreements.