Under California Insurance Code Section 333, which fact does an applicant generally NOT have a duty to communicate to the insurer?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
CIC Section 333 relieves a party from the duty to communicate information that the other party already knows, information the other ought to know with ordinary care, matters expressly waived, and risks excluded by a warranty or excepted from the policy where not otherwise material. Because the insurer is presumed to know the law and matters within its own knowledge, the applicant need not volunteer those facts. The exemption does not extend to material facts the insurer does not know; those must still be disclosed, and failing to disclose them would be concealment.
Why the other options are wrong
- B) A fact that materially increases the risk is exactly the type that must be disclosed; Section 333 only excuses immaterial or known matters.
- C) A fact the applicant knows would alter the insurer's decision is material and must be communicated; concealing it supports rescission.
- D) Prior claims history is generally material to underwriting and must be disclosed when relevant to the risk, so it is not exempt.
Memory hook
You do not have to teach the insurer its own business, but you must hide nothing it does not know and cannot see.