State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California law, if an insured's statement constitutes a warranty and the warranty is breached and material to the risk, the insurer may:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
California Insurance Code Section 447 provides that the violation of a material warranty entitles the insurer to rescind, which means treating the contract as void and being relieved of liability. A warranty is a statement or promise that the facts are as represented, and it may be express or implied. If the warranty proves false and is material to the risk, the insurer's obligation to provide coverage ends, which is the remedy the statute authorizes.
Why the other options are wrong
- A) Rescission, not a premium adjustment, is the remedy for a material breach of warranty.
- B) The insurer is relieved of liability rather than forced to continue the policy and sue for damages.
- C) Warranties are recognized in California under CIC Sections 440 through 449 and may be express or implied.
Memory hook
A broken material warranty means the policy is undone.