State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California Insurance Code Section 381, the insured's interest in the subject matter must be stated in the policy:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 381 requires the policy to state the insured's interest in the subject matter when the insured is not the absolute owner of the interest insured. If the insured holds only a limited interest — such as a creditor's or dependent's interest — the policy must describe it so the extent of coverage is clear. An absolute owner's interest is self-evident and needs no statement.
Why the other options are wrong
- B) The interest-statement requirement is general and applies across coverages, including life and health policies; it is not limited to property.
- C) The statement is a statutory requirement, not something the insured must request.
- D) A limited interest is not presumed; the statute requires it to be stated when the insured is not the absolute owner.
Memory hook
Own it outright? Nothing to print. Own a slice? Section 381 makes you say exactly what slice.