State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California Insurance Code Section 334, the materiality of a fact is determined by:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 334 states that materiality is determined not by the event, but solely by the probable and reasonable influence the facts would have on the party receiving the information — the insurer — in forming its estimate of the risk or making its inquiries. The test is judged at the time of contracting, looking forward, not by hindsight about what caused the loss or what was claimed.
Why the other options are wrong
- B) Materiality is judged by the influence on the insurer's risk decision, not by whether the fact caused the loss.
- C) The insured's intent is relevant to fraud, but Section 334's materiality test is objective.
- D) The eventual claim size is hindsight; materiality is assessed at the time of the contract.
Memory hook
Materiality looks forward at the insurer's decision, never backward at the loss.