Which term refers to an absolutely true statement essential to the validity of an insurance policy?

The term that refers to an absolutely true statement essential to the validity of an insurance policy is "warranty." In the context of insurance, a warranty is a specific provision within the policy that stipulates certain facts must remain true for the policy to be valid. If a warranty is proven to be untrue or violated, the insurer may have the right to deny coverage or void the policy. This element is critical because it ensures that both the insurer and the insured are entering into the contract with a clear understanding of the conditions that must be met for the policy to remain in effect.

In contrast, a binder refers to a temporary agreement that provides coverage until a formal policy is issued but does not have the same stringent requirements as a warranty. Misrepresentation involves providing false information that could void the policy but isn’t an inherent condition of validity like a warranty. An insuring agreement outlines what risks are covered under the policy but does not impose truth requirements like warranties do.