State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Which of the following is NOT required for a valid insurance contract?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The four elements of a valid contract are agreement (offer and acceptance), consideration, competent parties, and a lawful purpose. Insurance policies must also satisfy statutory requirements, such as the required specifications under CIC Section 381, and the policy is defined as a written instrument. But no notarization is required — a policy does not need to be notarized to be valid. The other three choices are core contract elements that must all be present for enforceability.
Why the other options are wrong
- B) Agreement is the mutual meeting of the minds — the application (offer) and the issued policy (acceptance) — and is indispensable.
- C) Consideration (the premium and application statements) is required to make the promise enforceable.
- D) The parties must be legally capable and the contract's purpose must be lawful for it to be valid.
Memory hook
Agreement, consideration, capacity, legality — a notary's stamp is nowhere on the list.