Which term describes the insurer's voluntary relinquishment of a contract provision?

• A. Concealment
• B. Waiver
• C. Warranty
• D. Assignment

Answer: (B)

Waiver is the voluntary relinquishment of a known right. In an insurance contract this means the insurer (or insured) consciously chooses not to enforce a specific provision even though the facts would allow enforcement. It can be shown through actions or words and requires awareness of the right being waived. Once a waiver occurs, that provision can’t be enforced for the covered situation, and the other party may rely on the relaxed requirement. For example, if the insurer accepts a late claim without penalizing the delay or enforcing the time limit, that conduct can be considered a waiver of the deadline. Concealment, warranty, and assignment describe different concepts: concealment is hiding material information, a warranty is a promise that a statement is true, and assignment is transferring policy rights to someone else.