On an insurance application, the applicant fails to disclose a serious heart condition that he knows about and that materially affects the risk. The insurer issues a life policy. Which California Insurance Code concept BEST describes this conduct?
Explanation
California Insurance Code §330 defines CONCEALMENT as 'neglect to communicate that which a party knows, and ought to communicate.' Under §331, 'Concealment, whether intentional or unintentional, entitles the injured party to rescind insurance' — a strict standard reflecting that materially silent applicants undermine the insurer's risk assessment in a contract of utmost good faith. WARRANTY (§440 et seq.) is a stated promise within the contract; breach also permits rescission but warranties are rarer in modern policies. REPRESENTATION (§350-§360) is an inducing statement; only MATERIAL misrepresentations support rescission. ADHESION is a contract-formation doctrine, not a disclosure rule. Option A misses that warranties are explicit contract promises. Option B does not capture failure to speak. Option D is off-topic. The hallmark of concealment is silence about a known, material fact.
Law Reference: California Insurance Code §330-359 (concealment, misrepresentation, warranties)Practice all 315 questions free — no signup required.
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