An event has already occurred, but neither party to an insurance transaction knows about it. Under California Insurance Code Section 22, may insurance be written on that event?

Why A is correct

Section 22 defines insurance as a contract to indemnify against loss, damage, or liability arising from a contingent or unknown event. The word 'unknown' covers events that have already occurred but are unknown to the parties. Section 250 reinforces this by stating that any contingent or unknown event, whether past or future, which may damage a person with an insurable interest may be insured against. The key is uncertainty from the contracting parties' perspective, not the chronological timing of the event.

Why the other options are wrong

• B) The statute expressly permits insurance on past events that are unknown to the parties; timing alone does not disqualify an event.
• C) Insurance requires the event to be unknown to the parties at contract formation; the insured's prior knowledge would destroy the uncertainty needed.
• D) No statutory rule restricts insurance to scheduled events; fortuitous and uncertain events, past or future, are the insurable class.

Memory hook

Unknown beats past: an event already happened is still insurable if no one knows. Uncertainty, not timing, decides.