In relation to contracts of insurance, a material fact is one which is likely to influence?

A material fact in the context of insurance contracts is one that may significantly influence the assessment of a proposed risk by the insurer. This means any information that could affect the underwriting decision or the terms of the insurance coverage being offered. For instance, if a potential policyholder does not disclose a pre-existing health condition when applying for health insurance, this would be a material fact that could sway the insurer's evaluation of the risk and potentially lead to the denial of coverage or claims related to that condition.

The other concepts mentioned, while related to insurance, do not capture the essence of what a material fact represents. The contractual capacity of the proposer pertains to whether an individual or entity has the legal ability to enter into a contract, which does not directly influence the risk assessment. The proximate cause relates to determining the direct cause of a loss under a policy, which is evaluated after a claim is made. Subrogation rights involve the insurer’s ability to recover costs from third parties after paying a claim, another later-stage consideration. Thus, the correct understanding of a material fact lies in its role in shaping the initial risk evaluation process.