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Question

III. INSURANCE LAW: F. Warranties (Sections 67-76)

An insurance policy contains several warranties that the insured must comply with. Failure to fulfill these warranties may have consequences for the insured. Analyze the following scenarios and determine the validity and effect of the warranties involved.

1. Alice applied for a life insurance policy and stated in her application that she is a non-smoker. However, five months after the policy was issued, it was discovered that Alice had started smoking. She died a year later due to lung cancer.
2. Benjamin purchased a car insurance policy and declared that the vehicle is only used for personal purposes. However, the car was being used for commercial purposes when it got involved in an accident. Benjamin is claiming for damages.
3. Carlos obtained a fire insurance policy for his house and declared that no other structures or dwellings are within a 10-meter radius. During a rainstorm, a tree from his neighbor's property fell and damaged Carlos' house, which turned out to be within the 10-meter radius of another structure.
4. Diana insured her jewelry collection and warranted that the pieces are kept in a secured vault. However, while she was on vacation, her house was burglarized, and the jewelry was stolen from her bedroom.

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Answer