Page 222 - Fire Insurance Ebook IC 57

Fire and Consequential Loss Insurance

are oral or written statements made before or at
the time of concluding the contract. Warranty has
to be strictly complied with. A breach of warranty
enables the insurers to avoid a claim whether or
not the breach has caused loss or aggravated the
loss, though a strict enforcement might be hard
upon the insured.

So, in practice insurers usually waive breach of warranty
if it is merely of technical type and does not contribute
or aggravate loss. In such cases , claims are treated as
'on standard' claims and settled according to certain
guidelines adopted by the companies. If the breach of
warranty involves extra premium, the loss is settled after
collecting additional premium.

d. Ex-gratia payment - These are the claims which are
paid as a matter of grace , where the loss is outside the
scope of the policy or the liability under the policy, in
strict legal sense. For e.g, a certain item of property
may have been missed out and not insured due to a
honest mistake.

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