State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California Insurance Code Section 22, for a contract to qualify as insurance, the event that triggers the insurer's obligation must be:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
CIC Section 22 defines insurance as a contract whereby one party agrees to indemnify another against loss, damage, or liability arising from a contingent or unknown event. The phrase 'contingent or unknown' is the statutory requirement that makes the arrangement insurance rather than a guarantee. If the event were certain, known, or within the insured's control, the element of fortuity would be absent and the contract could not be insurance under California law.
Why the other options are wrong
- B) An event certain to occur creates no uncertainty of loss; insurance requires a contingent event, not a scheduled one.
- C) A loss the insured controls is not fortuitous; intentionally caused losses are excluded from coverage.
- D) An event already known to both parties at contract formation lacks the unknown-element required by Section 22.
Memory hook
Insurance needs a maybe: the event must be contingent or unknown, otherwise it is a promise, not a policy.