State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under California Insurance Code Section 338, if an insured intentionally and fraudulently omits to communicate information that proves or tends to prove the falsity of a warranty:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 338 gives the insurer the right to rescind when the insured intentionally and fraudulently omits information proving or tending to prove the falsity of a warranty. This is one of the insurer's statutory rescission rights, along with unintentional concealment (Section 331), false material representation (Section 359), and violation of a material warranty (Section 447). Fraudulent concealment goes to the heart of the contract and supports unwinding it entirely.
Why the other options are wrong
- B) Rescission, not merely denial of a single claim, is the remedy provided for fraudulent concealment.
- C) Incontestability concerns contesting the policy on other grounds and does not arise from fraudulent omission.
- D) Refunding the premium is part of unwinding the contract, but rescission of the contract itself is the remedy.
Memory hook
Fraudulent silence about a false warranty = the insurer's trump card: rescission.