Property and casualty insurance (California) Practice Test

Marta applies for homeowners insurance with the same insurer that covered her last home and paid a theft claim two years ago. The application does not ask about prior losses, and she does not mention the theft. Later the insurer wants to rescind for nondisclosure of that theft. Is the insurer correct?

• ANo, because a party need not volunteer facts the other party already knows
• BYes, because every material fact must be volunteered even when the form does not ask
• CYes, because a prior policy is a separate contract and gives the insurer no knowledge
• DNo, but only because more than one year has passed since the theft

Keyboard shortcuts: Off