State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
In an insurance contract, which statement correctly identifies the parties?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
In every insurance contract the insurer is the party that assumes the risk and agrees to indemnify the insured, the party whose loss is covered. Under CIC Section 22, 'one party' — the insurer — promises to restore the other party financially after a covered loss. The insured's role is to pay the premium and submit claims; the insured never indemnifies the insurer.
Why the other options are wrong
- B) This reverses the relationship; the insured does not promise to restore the insurer's losses.
- C) Insurance is a one-way indemnity promise from insurer to insured; there is no equal mutual indemnification.
- D) The agent is not a party to the contract and does not bear the risk; the insurer is the indemnitor.
Memory hook
The insurer pays, the insured prays. Indemnity flows one way: from the company to the customer.