State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
Under California Insurance Code Section 334, a fact is material to an insurance risk if it:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 334 defines materiality by the influence the fact would have on the insurer: a fact is material if it would affect the insurer's decision to accept the risk or set the premium. The test is how a prudent insurer would have been influenced, not the actual outcome of the loss. This standard governs concealment, misrepresentation, and warranty disputes throughout the Insurance Code.
Why the other options are wrong
- B) Materiality is judged by influence on the insurer's decision, not by whether the fact happened to cause a particular loss.
- C) Appearing on the application does not make a fact material; many application items are informational, and some material facts are not even asked.
- D) Voluntary disclosure has no bearing on materiality; a fact is material by its effect on the insurer, not by how it was revealed.
Memory hook
Material = would it change the insurer's mind or the price? That is the Section 334 test, nothing else.