What does the Latin term caveat emptor mean in the context of insurance and remedies?

• A. Let the buyer beware.
• B. The insurer's obligation to pay on first demand.
• C. The policy is incontestable.
• D. The contract must be in writing.

Answer: (A)

Caveat emptor means “let the buyer beware.” In insurance, this principle puts the responsibility on the applicant/insured to disclose all material facts and to understand the policy terms before purchasing. If the buyer omits or misstates important information, the insurer may have grounds to void the policy or deny a claim, depending on the facts and applicable law. This idea highlights that the remedies you see (like claim denial or policy rescission) flow from the buyer’s duty to be honest and thorough in disclosure, rather than from the insurer’s benevolent obligation. The other options describe different concepts (paying on first demand, incontestability, writing requirements) and don’t capture this buyer-beware idea.