State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California Insurance Code Section 250, an event may be insured against only if it is contingent or unknown AND:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 250 provides that any contingent or unknown event, whether past or future, which may damnify a person having an insurable interest, or create a liability against that person, may be insured against. Both requirements must be met: the event must be contingent or unknown, and it must have the potential to cause loss to someone with an insurable interest or to create liability. The insurable-interest element prevents the arrangement from becoming a wagering contract on another's misfortune.
Why the other options are wrong
- B) An employer's approval is an internal business practice, not a condition stated in Section 250.
- C) Section 250 sets no minimum number of covered persons.
- D) Section 250 does not condition insurability on the event never having occurred before.
Memory hook
Contingency + insurable interest = insurable event. Both halves must be present.