David owns a liquor store in a high-crime area.In order to obtain a reduced insurance premium,David promised to have a burglar alarm operating at the store when the store was closed.This agreement,which was incorporated into the insurance contract,is an example of a

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Quizplus · Accepted Answer

A warranty is a statement of fact that is part of the insurance contract and is guaranteed to be true. In this case, David promised to have a burglar alarm operating, which is a statement of fact that is guaranteed to be true. Therefore, it is an example of a warranty. The other options are not applicable in this scenario. A representation is a statement made by the insured that is believed to be true but is not guaranteed to be true. A binder is a temporary agreement to provide insurance coverage until a formal policy is issued. A rider is an amendment to the insurance policy that adds or changes coverage.

David Owns a Liquor Store in a High-Crime Area