Under California Insurance Code Section 354, a representation may:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 354 provides that a representation cannot qualify an express provision in a contract of insurance, but it may qualify an implied warranty. This rule preserves the primacy of the written express terms of the policy while allowing representations some flexibility with respect to implied warranties, which are not written out in the contract. Because the premium is an express term stated in the policy, a representation cannot alter it, and changing the named insured modifies the identity of the parties to the contract itself, which requires the insurer's consent through proper endorsement procedures rather than a representation.
Why the other options are wrong
- D) Section 354 states the opposite rule: a representation cannot qualify an express provision in a contract of insurance. This contradicts the governing rule explained above and therefore cannot be the correct answer.
- B) The premium stated in the policy is an express provision. A representation cannot override or qualify an express term such as the premium. The controlling legal standard set out above demonstrates precisely why this option is incorrect.
- C) Changing the named insured alters the parties to the contract and requires the insurer's consent through a proper endorsement. It is not within the scope of a representation. This choice misstates what the statute actually requires, so it must be eliminated from consideration.
Memory hook
Representation can bend an implied warranty but never an express line. Written words win over spoken hopes.