State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 3/5
Under California Insurance Code Section 250, for an event to be insurable it must be contingent or unknown AND must be one that:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 250 requires two elements: the event must be contingent or unknown, and it must be an event 'which may damnify a person having an insurable interest' — that is, it must be capable of causing financial loss to someone with a stake in the contract. If either element is missing, the event is not an insurable event. This dual requirement links the definition of insurable events to the insurable interest doctrine and to the fortuity principle.
Why the other options are wrong
- B) An event that has already caused a verified loss is no longer contingent or unknown, so it fails the statutory test.
- C) A certain event lacks the contingent or unknown quality that Section 250 requires for insurability.
- D) The statute does not limit insurable events to third-party negligence; first-party events such as illness and injury are also insurable.
Memory hook
Section 250's two keys: uncertain event + possible financial harm to an interest holder.