California Insurance License Exam Practice Test Practice Question
What recourse does an insurer have if violation of a material warranty on the part of the insured is discovered?
Correct Answer: D
Rationale: When a material warranty is violated by the insured, rescission of the policy is the insurer's primary recourse. This means the insurer can void the contract, as the warranty was a crucial element of the agreement.
Option A is incorrect; while the Insurance Commissioner may oversee regulatory matters, they do not typically handle individual policy disputes regarding warranties.
Option B is also misleading; while courts can address insurance disputes, the specific recourse for warranty violations typically does not require a court hearing unless contested.
Option C is inaccurate; the insurer retains the right to rescind a policy regardless of how long it has been in force if a material warranty is violated.
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