Which term describes a provision that pledges a condition exists now or will exist in the future?

• A. Waiver
• B. Estoppel
• C. Indemnity
• D. Warranty

Answer: (D)

A warranty is a promise about the truth of a fact, guaranteed to be true either now or at some point in the future. In an insurance contract, this means a provision asserts that a certain condition exists today or will exist going forward. Because the contract is based on that guarantee, breaching a warranty can have serious consequences, such as voiding the policy or denying claims, since the insurer relied on those asserted facts when underwriting.

Think of it as a firm pledge about a fact’s status—not just a belief or expectation, but something the contract treats as true. That’s what sets a warranty apart from other terms like waivers (voluntarily giving up a right), estoppel (preventing denial based on prior statements), or indemnity (compensation for loss), none of which claim a condition will exist in the future.