CT Property & Casualty cheat sheet

Insurance regulation in the United States is primarily state-based under the McCarran-Ferguson Act (1945); Connecticut's regulator is the Connecticut Insurance Department.

Only insurers holding a certificate of authority (admitted insurers) may transact insurance in Connecticut; admitted insurers are backed by the state guaranty association.

Surplus lines insurers are non-admitted but eligible carriers; their policies are not protected by the guaranty fund and may be used only when admitted markets decline the risk.

Rates must not be excessive, inadequate, or unfairly discriminatory; Connecticut property/casualty rates are generally filed on a file-and-use basis.

Unfair trade practices include rebating, twisting, misrepresentation, false advertising, boycott, and coercion; offering any part of a commission as an inducement is prohibited.

Producers must hold a license for each line sold, must complete continuing education to renew, and must report administrative actions within the required time.

Fiduciary duty: premiums collected from insureds are held in trust and must be accounted for and remitted to the insurer or return premium to the insured.

The Connecticut Insurance Guaranty Association pays covered claims of insolvent admitted insurers, subject to statutory per-claim limits and deductibles.

A producer license may be denied, suspended, or revoked for fraudulent practices, misappropriation of premium, or certain criminal convictions.

Principle of indemnity: recovery is limited to the actual financial loss, so the insured cannot profit from insurance.

Insurable interest must exist at the time of loss for property insurance; for life insurance it must exist at policy inception.

ACV = replacement cost minus depreciation; replacement cost valuation pays new-for-old with no depreciation deduction.

Coinsurance payment = (insurance carried / insurance required) x loss, never exceeding the policy limit and then reduced by the deductible.

Utmost good faith imposes duties of accurate representation, warranty compliance, and no concealment; material misrepresentation can void coverage.

Subrogation transfers the insured's right of recovery against a negligent third party to the insurer after the insurer pays the loss.

A policy is a contract of adhesion; ambiguities are construed against the insurer, and waiver or estoppel can prevent a later denial.

Hazard types: physical (icy steps), moral (intentional fraud), and morale (carelessness or indifference).

Risk pooling and the law of large numbers let insurers predict losses; adverse selection occurs when poor risks buy coverage disproportionately.

Property policies cover real property (buildings) and personal property using either named-peril or open-peril (special) forms.

Basic named perils include fire, lightning, windstorm, hail, explosion, riot, aircraft, vehicles, smoke, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action.

Extended coverage adds windstorm, hail, explosion, riot, civil commotion, aircraft, vehicles, and smoke to fire and lightning.

A coinsurance clause (e.g., 80%) requires carrying insurance to that percentage of value, or partial losses are penalized proportionally.

Replacement cost pays without depreciation; actual cash value deducts depreciation; extended replacement cost adds a percentage above the limit.

Loss of use or additional living expense reimburses increased living costs while the dwelling is uninhabitable from a covered peril.

A mortgagee clause gives the lender separate rights to loss proceeds and notice of cancellation; a loss payable clause covers other lienholders.

Debris removal, preservation of property, and pair and set are additional coverages built into property forms.

Deductibles apply per occurrence before payment; blanket limits apply across multiple locations or property categories.

Negligence requires four elements: duty owed, breach of duty, proximate cause, and actual damages.

Compensatory damages include special damages (medical bills, lost wages) and general damages (pain and suffering); punitive damages punish conduct.

Strict or absolute liability applies to ultrahazardous activities and certain product defects without proof of negligence.

Vicarious liability (respondeat superior) holds an employer liable for employee acts committed within the scope of employment.

Occurrence policies cover injury occurring during the policy period; claims-made policies cover claims first made during the period, subject to a retroactive date.

Supplementary payments such as defense costs and bail bonds are paid in addition to the liability limit in standard CGL and auto liability forms.

Split limits set separate per-person and per-occurrence maximums; a combined single limit provides one total amount per occurrence.

Medical payments coverage pays medical expenses regardless of fault; uninsured and underinsured motorist coverage responds to negligent drivers lacking adequate insurance.

Defense costs are outside the limit in standard CGL and PAP liability, but erode the limit in many professional and specialty policies.

Dwelling forms DP-1 (basic), DP-2 (broad), and DP-3 (special) insure residential property not eligible for a homeowners policy, including rental dwellings up to four units.

Standard coverages: A Dwelling; B Other Structures (default 10% of A); C Personal Property (default 50% of A); D Fair Rental Value (default 20% of A).

DP-1 covers basic named perils plus vandalism and glass; DP-2 adds broad perils; DP-3 covers the dwelling and other structures on open perils.

Under DP-3, personal property remains insured for named perils only, not open perils.

Dwelling policies contain no liability coverage; Section II liability must be added by endorsement.

Standard dwelling forms pay actual cash value; replacement cost on the dwelling or contents requires an endorsement.

Theft coverage is limited on premises and off-premises theft requires an endorsement.

Dwelling policies do not contain a coinsurance requirement.

Coverage D pays fair rental value or additional living expense when the dwelling is unfit for occupancy due to a covered peril.

HO-3 covers the dwelling and other structures on open perils and personal property on named perils; HO-5 covers both on open perils.

HO-4 (renters) covers personal property, loss of use, and liability; HO-6 (condo) covers unit interiors, building improvements, and loss assessment; HO-8 is for older homes.

Standard limits: Coverage B 10% of A; Coverage C 50% of A (HO-3) or 70% (HO-5); Coverage D 30% of A; Coverage E $100,000; Coverage F $1,000 per person.

Section I contains property coverages A through D; Section II contains Coverage E personal liability and Coverage F medical payments to others.

HO-3 excludes earth movement, flood, ordinance or law, neglect, intentional loss, power failure, war, nuclear hazard, and business pursuits.

Personal property is valued at actual cash value unless a replacement cost or scheduled personal property endorsement is added.

Loss of use pays additional living expense, fair rental value, and prohibited use for the reasonable time needed to repair or relocate.

Duties after loss include prompt notice, protecting property from further damage, preparing an inventory, cooperating, and submitting proof of loss within 60 days.

A mortgagee clause protects the lender's interest, and loss payments under dwelling coverages do not reduce the policy limit.

PAP Part A is liability; Part B is medical payments; Part C is uninsured/underinsured motorists; Part D is damage to your auto.

Covered auto includes the described auto, newly acquired autos (typically 14 days for an additional auto, 4 days for a replacement), temporary substitutes, and non-owned autos.

Part A pays compensatory damages for bodily injury and property damage plus defense costs outside the limit.

Part C pays for injury caused by an uninsured or underinsured motorist; Connecticut requires the coverage to be offered and limits cannot exceed the liability limits.

Part D collision pays regardless of fault subject to the deductible; other-than-collision covers theft, fire, glass, animals, and weather.

Key exclusions: intentional damage, racing or speed contests, livery or public transportation use, delivery for pay, and use without permission.

The insurer must give advance written notice of cancellation and nonrenewal; refunds are pro rata when the insurer cancels.

Named driver exclusions and the household member definition determine who is an insured for the described auto.

Transportation expenses and towing/rental reimbursement are optional Part D coverages; state financial responsibility laws require proof of liability insurance.

A CPP combines coverage parts under common declarations and conditions: commercial property, general liability, auto, inland marine, crime, and equipment breakdown.

Commercial property covers buildings, business personal property, and personal property of others, with coinsurance and blanket limit options.

Causes of loss forms are basic, broad, and special; the special form is open perils subject to stated exclusions.

CGL Coverage A covers bodily injury and property damage; Coverage B covers personal and advertising injury; Coverage C covers medical payments.

CGL limits include each occurrence, general aggregate, products-completed operations aggregate, personal and advertising injury limit, damage to premises rented limit, and medical expense limit.

Occurrence CGL covers injury during the policy period; claims-made CGL covers claims first made during the period, subject to a retroactive date and extended reporting periods.

Business income and extra expense replace lost earnings and added costs incurred while the business restores operations.

Additional insured endorsements, waivers of subrogation, and primary and noncontributory wording are common contractual insurance requirements.

The CPP is a vehicle, not a policy; each coverage part must be selected, rated, and attached to the package.

The BOP targets small and medium businesses such as apartments, offices, retail, and service risks, subject to eligibility limits on size, occupancy, and hazards.

BOP property covers the building, business personal property, and business income, usually on a replacement cost basis.

BOP liability resembles the CGL: bodily injury, property damage, personal and advertising injury, products-completed operations, and medical payments.

Business income is provided for 12 consecutive months after a covered loss, plus an extended period of indemnity in many forms.

BOP property generally has no coinsurance clause; coverage is written at full replacement cost.

Optional coverages include employee dishonesty, equipment breakdown, spoilage, money and securities, outdoor signs, and mechanical breakdown.

Ineligible risks, such as auto dealers, bars and taverns, and large manufacturers, must be written on a commercial package policy.

Standard sublimits apply to money and securities, outdoor signs, and accounts receivable.

Loss of business income requires a suspension of operations caused by direct physical loss at the described premises.

Workers compensation is no-fault and provides the exclusive remedy against the employer for work-related injury or occupational disease.

Four benefit categories: medical, disability income (indemnity), death, and rehabilitation.

Indemnity benefits include temporary total, temporary partial, permanent partial, and permanent total, based on state schedules and wage replacement percentages.

Part Two, Employer's Liability, covers tort claims not covered by the exclusive remedy, with separate per-accident and per-employee disease limits.

Coverage territory is defined in the policy, usually the states listed in Item 3.A; additional states require an endorsement.

Premium = payroll per $100 of remuneration x class rate, adjusted by the experience modification factor and premium discounts.

Sole proprietors, partners, and LLC members are excluded unless they elect coverage; properly classified independent contractors are excluded.

Second injury funds and assigned risk pools provide coverage for employers with difficult placements.

Benefits are payable regardless of fault, so contributory negligence and assumption of risk are not defenses to a compensable claim.

Umbrella policies provide excess limits over underlying auto, general liability, and employers liability, and may drop down to cover gaps subject to a self-insured retention.

NFIP flood insurance covers direct physical loss from flooding, with separate building and contents limits and a 30-day waiting period in most cases.

Difference in conditions (DIC) coverage fills gaps left by exclusions such as flood and earthquake in standard property forms.

Inland marine covers property in transit and bailee exposures, including motor truck cargo, jewelers block, fine arts, and contractors equipment.

Crime coverage includes employee dishonesty, forgery or alteration, computer fraud, and funds transfer fraud; fidelity is first-party, surety is third-party.

Surety bonds involve three parties: obligee, principal, and surety; they guarantee performance, payment, or license compliance rather than insuring loss.

Equipment breakdown (boiler and machinery) covers mechanical or electrical failure and the resulting business income loss.

A personal umbrella requires specified underlying auto and homeowners liability limits and provides broader liability coverage above them.

Cyber liability, employment practices liability, and directors and officers liability are specialty coverages for data breach, employment claims, and management acts.