State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California law, if an insured breaches a warranty that is material to the risk, the legal consequence is that the insurer:
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
A warranty is a promise that a fact or state of affairs is true, and under California law (CIC Sections 440-449, especially Section 447) the breach of a warranty that is material to the risk entitles the insurer to rescind the contract — that is, treat it as void. Warranties may be express or implied, and unlike representations, a warranty breach does not require intent; strict compliance may be required.
Why the other options are wrong
- B) Rescission, not a premium refund with continuation, is the remedy; the contract is avoided and unearned premium is generally returned as part of the rescission accounting.
- C) Paying the claim and cancelling prospectively is not the law; a material warranty breach avoids the contract entirely.
- D) Rescission, not a damages action, is the insurer's remedy for breach of warranty under Section 447.
Memory hook
Warranty = a promise that must hold. Break it — even innocently — and the insurer can void the whole deal.