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Types of guarantees in insurance



Watch the full video at https://rumble.com/vq2iv2-a-video-explaining-types-of-warranties.html and at https://youtu.be/S0J9rmHB4dw [19659004] Express Guarantee

Express Guarantees refers to the current or past existence of specific facts relating to the risk on which the validity of the Agreement depends. [California Insurance Code § 440.]

A statement of fact becomes an express guarantee when the insurer and the insured comply with California Insurance Code section 443. Section 443 states:

All express guarantees made at or before the execution of an insurance shall be included in the insurance itself, or in another instruments signed by the insured and referred to in the insurance, as part of it.

Some examples of explicit guarantees include the following statements:

  • "My business is a partnership." [19659010] "My building is reinforced bricks. "
  • " I have never been canceled by any insurer. "
  • " I am 45 years old and have never smoked cigarettes. "

The California Insurance Code further explains the concept. of the express guarantee by saying:

A statement in an insurance policy on a matter concerning the insured person or thing, or to the risk, as a matter of fact, is an express guarantee for this. Breach of an express warranty will invalidate a policy in its entirety. Se Aguirre v. Citizens Cas. Co. or N.Y. 441 F.2d 141 (5th Cir. 1971); Saskatchewan Gov’t Ins. Office v. Spot Pack, Inc. 242 F.2d 385, 388 (5th Cir.1957).] In The British Case, AC Ward & Sons Ltd v. Catlin (Five ) Ltd & Ors [2009] Commercial Court, the insurers tried to avoid coverage for faults in an alarm system, which was guaranteed by the insured to work. The court concluded that the guarantee was not limited to the specific "protections" specified in the proposal form, nor was the alarm guarantee limited to such alarm systems that could have been identified in the schedule.

As a matter of commercial common sense. , the warranties referred to what protection or alarms actually existed, whether or not they were identified in the policy documentation. With regard to knowledge, the court took the view that a breach of warranty could only occur in the event of an error which the insured was aware of, or should reasonably have been aware of, and which it subsequently failed to remedy expeditiously. But even if the alarm guarantee was not effective, the insured also promised that the theft protection for cigarettes and tobacco in a warehouse would not work outside office hours unless the warehouse was kept in the special secure store on the ground floor. Since they were not on the first floor, the insured was not allowed to recover.

The Federal Admiralty Act requires strict construction of explicit guarantees in marine insurance contracts. [ Resande Prop. Cas. Co. of Am. v. Ocean Reef Charters, LLC, 396 F.Supp.3d 1170 (S.D. Fla. 2019)]

Admiralty legislation requires strict construction of explicit guarantees in marine insurance contracts; the insured's breach of the express guarantee releases the insurance company from liability. [ Lexington Ins. Co. v. Cooke & # 39 ;s Seafood 835 F.2d 1364, 1367-38 (11th Cir. 1988) which confirmed a judgment in favor of the insurer based on breach of a navigation guarantee).

Confirmatory guarantee. [1465 ] A confirmatory guarantee asserts an existing fact or condition that appears on the front of the insurance or "is linked to it and is part of it." It is limited in time to the time of application. The following statements are examples of an existing fact or condition:

  • "The property is protected by a fire sprinkler system."
  • "The roof is brick."
  • "There is a silent burglar on the central station alarm system."
  • " I have been treated for high blood pressure. "
  • " There is a caretaker on duty at all times when the business is closed. "
  • " All business records are kept when not in use in a fireproof iron cabinet. "

When a an insurance claim for full-time employment is a “confirmatory guarantee.” A breach of a positive guarantee cannot be a ground for termination of the insurance unless the insurer relies on the positive guarantee and the positive guarantee is either material or made with the intent to mislead; or The plaintiff alleges that Wisconsin's law limits an insurance company's ability to invalidate the coverage and claims that undisputed facts do not meet its requirements. a limits. [ Stanczyk v. Prudential Ins. Co. of Am. (ND Iowa, 2017)] A confirmatory guarantee is a guarantee that claims to be a fact at the time the insurance is taken out, and that appears on the front of said insurance, or is linked to it and is made a part of the. [ Hicks v. Mennonite Mut. Ins. Co., 2011 Ohio 499 (Ohio App. 2011)]

I Reid v. Hardware Mut. Ins. Co. of Carolinas (1969), 252 SC 339, 166 SE2d 317, who considered that the designation of a dwelling as "property" is a positive guarantee rather than a continuous guarantee and does not exclude the named insured from recovering under the insurance after that the premises were sold to another party. Since the insurance contract contained a description of the insured home as "property", the provision was a positive guarantee, not a continuous guarantee that the home was so inhabited by him at the time the insurance contract was entered into. [ Hicks v. Mennonite Mut. Ins. Co., 2011 Ohio 499 (Ohio App., 2011)]

Fulfillment of insurance guarantees by the insured or by the insurer is important for any investigation of insurance claims. It is important that each injured party or insurance coverage lawyer understands the effect of guarantees and establish that each guarantee provided was met at the time of entry or at the time of loss.


© 2021 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his internship to the position of insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders.

He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as a lawyer for insurance coverage and claims management and more than 54 years in the insurance industry.

Subscribe to Excellence in Claims Handling at https://barryzalma.substack.com/welcome.

He is available at http://www.zalma.com and zalma@zalma.com. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award. For the past 53 years, Barry Zalma has devoted his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their claimants to become professionals in insurance claims.

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