State Farm Insurance License Practice Exam

What are Implied Warranties in ocean marine insurance?

1. Written clauses that guarantee coverage

2. Warranties that are customarily part of the policy

3. Voluntary agreements between parties

4. Claims that must be documented

The correct answer is: Warranties that are customarily part of the policy

Implied warranties in ocean marine insurance refer to essential obligations and conditions that are automatically assumed to be included in the policy, even if they are not explicitly stated or written out. These warranties traditionally cover aspects such as seaworthiness, the proper use of the vessel, and the legality of the voyage. When engaging in ocean marine activities, there is a general understanding that vessels must be properly maintained and capable of navigating safely. This foundational principle supports the idea that certain standards are consistently expected in marine insurance contracts. As a result, even if these warranties are not explicitly included in the written policy, they are still recognized as part of the agreement due to the customary nature of marine insurance practices. In contrast, options that refer to written clauses or voluntary agreements do not capture the essence of what implied warranties represent in the context of marine insurance. Similarly, the concept of claims that must be documented does not relate to the inherent expectations tied to implied warranties, which are more about the nature of the coverage itself than specific claims processes.