The Divergences between Warranty and Exclusion in Insurance Law─Focused on the Principle of Equality of the Premium and Coverage

In the concerned cases, the main dispute on section 66 and below of Insurance Law is the unclear distinction measure between warranty and exclusion, which causes the scope of application unfamiliar. The insurer can refuse claims without the limitation of manner or period, which is based on exclusions, while there are restrictions on them with warranties. In other words, the distinction measure makes huge differences in parties.

Notwithstanding integration of cases, it is difficult to find the common measure for distinction between warranty and exclusion. As for discussion in the domestic papers at present, one is based on the divergences between warranty and exception on Common Law, the other is based on the divergences between exclusion and incidental obligation on German Insurance Law. However, the both are different from the warranty in section 66 and below of Insurance Law on actual operation.

After examination for exclusion or other similar clauses, we will find their common purpose is to exclude specific risk with risk assessment and deduction on that part of premium. The core of divergences between the exclusion or other similar clauses and warranty is that risk assessment as well as premium, not whether the clause is about the insured’s obligation or not. Following the above distinction, it is easy to find the appropriate elements and effects of these two clauses.