Under California Insurance Code Section 333, an applicant is NOT required to disclose which of the following?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 333 provides that neither party to an insurance contract is bound to communicate information the other party already knows, information the other party ought to know in the exercise of ordinary care, information whose communication is waived, and information relating to risks excluded by warranty or excepted from the policy and not otherwise material. The insurer is presumed to know common facts about its own business and risk selection. The applicant, however, must answer the insurer's inquiries honestly, and matters uniquely within the applicant's knowledge — such as personal health, occupation, and habits — remain the applicant's duty to disclose when asked.
Why the other options are wrong
- B) A material medical condition is precisely what the insurer needs to classify the risk; the applicant must answer the insurer's inquiry truthfully, and concealing it can void the policy.
- C) A hazardous occupation materially affects the risk and must be disclosed; the insurer's failure to ask does not excuse concealing a material known fact that affects the risk being insured.
- D) A dangerous hobby is a material fact affecting underwriting; the applicant's plan to disclose it elsewhere does not relieve the duty to provide accurate information in the application.
Memory hook
No duty to state the obvious: what the insurer knows, should know, or waives. But your own secrets are still your duty.