FL Property & Casualty cheat sheet

Pure risk (chance of loss only) is insurable; speculative risk (chance of loss or gain) is not insurable.

A peril is the cause of loss (fire, wind); a hazard increases the chance a peril will occur - physical (icy steps), moral (dishonest intent), morale (carelessness).

Elements of an insurable risk: many similar exposure units, accidental loss, definite and measurable loss, non-catastrophic, and calculable probability under the law of large numbers.

Four principles applied to every property claim: indemnity, insurable interest, subrogation, and utmost good faith.

Insurable interest timing: property insurance requires interest at the time of loss; life insurance requires interest only at policy inception.

The policy is a contract of adhesion and aleatory - drafted by the insurer, unequal exchange, and ambiguities are construed against the drafter.

Retention vs. transfer: deductibles, self-insurance, and copays retain risk; insurance, reinsurance, and surety bonds transfer it.

Adverse selection is the tendency of poorer-than-average risks to seek coverage; controlled through underwriting, exclusions, and rating classes.

Representations are statements believed true, warranties are guaranteed true, and concealment is intentional silence - a material misrepresentation can void coverage.

Actual cash value = replacement cost − depreciation. Replacement cost pays new for old with no depreciation deduction.

Coinsurance payment = (limit carried ÷ (value × required %)) × loss, never exceeding the policy limit; carrying the required percentage avoids the penalty.

Standard HO percentage relationships: Coverage B (other structures) = 10% of Coverage A; Coverage C (personal property) = 50% of A; Coverage D (loss of use) = 30% of A.

Homeowners forms: HO-2 broad named peril, HO-3 special (open peril) on the dwelling with broad peril contents, HO-5 open peril on both, HO-4 tenants, HO-6 condominium unit owners, HO-8 modified for older homes (functional replacement cost).

Typical HO special limits: $200 money, $1,500 securities, $1,500 theft of jewelry/furs, $2,500 theft of silverware, $2,500 theft of firearms, $2,500 business property on premises.

Insured duties after loss: give prompt notice, protect property from further damage, submit a signed proof of loss, cooperate in investigation, and submit to examination under oath.

Named-peril forms pay only when a listed peril causes the loss; special/open-peril forms pay for all risks of direct physical loss except those excluded.

Key provisions: mortgagee clause protects the lender's interest, appraisal resolves disputes over the amount of loss, and pair-or-set losses are valued considering the value of the whole set.

Florida's valued policy law requires payment of the full dwelling limit when a covered peril causes a total loss of the building, regardless of actual cash value.

Liability insuring agreement: the insurer pays sums the insured is legally obligated to pay as damages because of bodily injury or property damage caused by an occurrence.

CGL architecture: Coverage A bodily injury/property damage, Coverage B personal and advertising injury, Coverage C medical payments; Coverage D contains conditions, not a grant of coverage.

CGL limits: each occurrence, general aggregate, products-completed operations aggregate, damage to premises rented, and medical expense limit - the each-occurrence limit is normally the most paid for one loss.

Supplementary payments (defense costs, bail bonds, loss of earnings up to $250 per day) are paid in addition to the limit of liability.

The duty to defend is broader than the duty to indemnify; defense obligations continue until limits are exhausted unless a defense-within-limits form is used.

Common CGL exclusions: expected or intended injury, contractual liability, pollution, workers' compensation/employer's liability, autos/aircraft/watercraft, professional liability, and recall of the insured's product.

Occurrence forms respond to injury during the policy period; claims-made forms respond to claims first made during the period, subject to the retroactive date and any extended reporting period.

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

Personal and advertising injury offenses include libel, slander, false arrest, malicious prosecution, wrongful eviction, and infringement of copyright or trade dress.

Commercial property causes-of-loss forms: Basic (named perils), Broad (named perils plus breakage/water damage), Special (open peril, all risks except exclusions).

Business income = net income that would have been earned + continuing normal operating expenses during the period of restoration; a 72-hour waiting period applies to business income and civil authority losses.

Extra expense pays the cost to continue operations, such as renting temporary space or equipment, after a covered loss.

Ordinance or law coverage: Part A = value of the undamaged portion that must be demolished, Part B = demolition cost, Part C = increased cost of construction to meet current code.

Blanket insurance applies one limit over multiple locations or coverages; an agreed value option suspends the coinsurance requirement; reporting forms adjust premium to reported values.

Standard CGL limits commonly quoted: $1,000,000 each occurrence, $2,000,000 general aggregate, $2,000,000 products-completed operations aggregate.

Surety bonds (bid, performance, payment) involve three parties - obligee, principal, and surety - and unlike insurance the principal must reimburse the surety for losses paid.

Florida workers' compensation thresholds: construction employers with one or more employees and non-construction employers with four or more; corporate officers and sole proprietors may elect exemption.

Commercial auto covered-auto symbols: 1 = any auto, 2 = owned autos, 8 = hired autos, 9 = non-owned autos.

Florida no-fault PIP: $10,000 per person paying 80% of reasonable medical expenses and 60% of lost wages, plus a $5,000 death benefit; initial medical services must be sought within 14 days of the crash.

PIP pays up to $2,500 unless a licensed provider diagnoses an emergency medical condition, which unlocks the full $10,000.

Florida required auto coverage for private passenger cars: $10,000 PIP and $10,000 property damage liability; bodily injury liability is not mandated for private passenger autos.

Florida tort threshold for pain and suffering: death, permanent injury, significant and permanent loss of a bodily function, or permanent scarring/disfigurement.

Uninsured motorist coverage must be offered at limits equal to bodily injury limits; a rejection must be in writing, and UM is non-stacking unless stacking is purchased.

Personal auto Part D: collision and other-than-collision (comprehensive), plus towing and labor, transportation expenses, and loss of use; deductibles apply per occurrence.

HO-3 insures the dwelling on a special/open-peril basis and personal property on a broad named-peril basis; HO-5 insures both on a special basis.

HO-4 covers a tenant's personal property, liability, and loss of use only; HO-6 adds building items and loss assessment coverage for a condominium unit owner.

Florida law lets the insured choose the windshield repair or replacement facility; the insurer may not require a particular shop.

Regulatory split: the Department of Financial Services licenses agents through the Division of Insurance Agent and Agency Services; the Office of Insurance Regulation reviews rates and policy forms.

License types: 2-20 General Lines agent (property, casualty, surety); 4-40 Customer Representative (works through an agency and cannot independently solicit).

Continuing education: 24 hours every two years, including 3 hours of ethics; licenses renew biennially by the last day of the licensee's birth month.

Appointment: the insurer must file the appointment with DFS within 30 days, and the agent may not transact business until the appointment is in force.

Fiduciary duties: premiums are held in trust, commingling with personal or agency funds is prohibited, and transaction records must be kept at least 3 years.

Prohibited practices under section 626.9541 include rebating, twisting, misrepresentation, false advertising, and unfair claim settlement practices; penalties include fines, suspension, and revocation.

FIGA pays covered claims of insolvent property and casualty insurers up to $300,000 per claim with a $100 deductible paid by the claimant; the Florida Hurricane Catastrophe Fund supplies state-backed hurricane reinsurance.

Personal lines notice rules: 45 days' written notice before cancellation or nonrenewal, and 10 days for nonpayment of premium; hurricane deductibles must be offered as $500 or 2%, 5%, or 10% of Coverage A.

2023 tort reform (HB 837) moved Florida to modified comparative fault, barring recovery when the claimant is more than 50% at fault, and set a 2-year statute of limitations for general negligence claims accruing after March 24, 2023.

Pure risk (chance of loss only) is insurable; speculative risk (chance of loss or gain) is not insurable.

A peril is the cause of loss; a hazard increases the chance a peril will occur - physical, moral, or morale.

Insurable risk traits: many similar exposure units, accidental, definite and measurable loss, non-catastrophic, calculable probability.

Core legal principles: indemnity, insurable interest, subrogation, and utmost good faith.

Property insurance requires insurable interest at the time of loss; life insurance requires it at policy inception.

The policy is a contract of adhesion and an aleatory contract; ambiguities are construed against the insurer that drafted the form.

Retention vs. transfer: deductibles, self-insurance, and copayments retain risk; insurance, reinsurance, and surety bonds transfer risk.

Adverse selection is the tendency of poorer-than-average risks to buy coverage, controlled by underwriting, exclusions, and rating classes.

Representations are statements believed true, warranties are guaranteed true, and concealment is intentional silence; a material misrepresentation can void coverage.

Actual cash value = replacement cost − depreciation; replacement cost pays new for old with no depreciation deduction.

Coinsurance payment = (limit carried ÷ (value × required %)) × loss, never exceeding the policy limit.

Standard HO percentages: Coverage B = 10% of Coverage A, Coverage C = 50% of A, Coverage D = 30% of A.

Forms: HO-2 broad, HO-3 special dwelling with broad contents, HO-5 open peril, HO-4 tenants, HO-6 condominium, HO-8 modified for older homes.

Typical HO special limits: $200 money, $1,500 securities, $1,500 theft of jewelry, $2,500 theft of silverware, $2,500 theft of firearms.

Duties after loss: prompt notice, protect property from further damage, signed proof of loss, cooperation, and examination under oath.

Named-peril forms pay only for listed perils; special/open-peril forms pay for all direct physical loss except exclusions.

Mortgagee clause protects the lender; appraisal resolves amount-of-loss disputes; pair-or-set losses consider the value of the whole set.

Florida's valued policy law pays the full dwelling limit for a total loss of a building caused by a covered peril.

The liability insuring agreement pays sums the insured is legally obligated to pay as damages for bodily injury or property damage caused by an occurrence.

CGL layout: Coverage A bodily injury/property damage, Coverage B personal and advertising injury, Coverage C medical payments; Coverage D is conditions only.

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

Supplementary payments (defense costs, bail bonds, loss of earnings up to $250 per day) are paid in addition to the limit of liability.

The duty to defend is broader than the duty to indemnify and continues until limits are exhausted unless defense is within limits.

Typical CGL exclusions: expected or intended injury, contractual liability, pollution, workers' compensation, auto/aircraft/watercraft, professional liability, product recall.

Occurrence forms respond to injury during the period; claims-made forms respond to claims made during the period, after the retroactive date.

Negligence requires all four elements: duty, breach, proximate cause, and damages.

Personal and advertising injury includes libel, slander, false arrest, malicious prosecution, wrongful eviction, and copyright or trade dress infringement.

Commercial causes-of-loss forms: Basic (named), Broad (named plus breakage/water damage), Special (open peril).

Business income = net income plus continuing operating expenses during the period of restoration; a 72-hour waiting period applies.

Extra expense pays costs to continue operations after a covered loss, such as temporary space or rented equipment.

Ordinance or law: Part A undamaged portion value, Part B demolition cost, Part C increased cost of construction to meet code.

Blanket insurance uses one limit for multiple locations; agreed value suspends coinsurance; reporting forms adjust premium to reported values.

Standard CGL limits: $1,000,000 each occurrence, $2,000,000 general aggregate, $2,000,000 products-completed operations aggregate.

Surety bonds (bid, performance, payment) are three-party - obligee, principal, surety - and the principal must reimburse the surety.

Florida workers' compensation applies to construction employers with 1+ employees and non-construction employers with 4+ employees.

Commercial auto symbols: 1 = any auto, 2 = owned autos, 8 = hired autos, 9 = non-owned autos.

Florida PIP: $10,000 paying 80% of medical expenses and 60% of lost wages plus a $5,000 death benefit; care must begin within 14 days.

PIP pays $2,500 unless an emergency medical condition is diagnosed, which releases the full $10,000.

Florida required private passenger coverage: $10,000 PIP and $10,000 property damage liability.

Florida pain-and-suffering threshold: death, permanent injury, permanent loss of a bodily function, or permanent scarring/disfigurement.

UM must be offered at bodily injury limits, rejection must be written, and UM is non-stacking unless stacking is purchased.

PAP Part D includes collision, other-than-collision, towing and labor, transportation expenses, and loss of use, with deductibles per occurrence.

HO-3 covers the dwelling on a special basis and contents on a broad named-peril basis; HO-5 covers both on a special basis.

HO-4 covers a tenant's contents and liability only; HO-6 adds building items and loss assessment coverage for unit owners.

Florida law lets the insured choose the windshield repair shop; the insurer may not require a particular vendor.

DFS licenses agents through the Division of Insurance Agent and Agency Services; the Office of Insurance Regulation reviews rates and forms.

The 2-20 General Lines license covers property, casualty, and surety; the 4-40 Customer Representative works through an agency.

Continuing education is 24 hours every two years including 3 hours of ethics; licenses renew by the last day of the birth month.

The insurer must file an appointment with DFS within 30 days, and the agent cannot transact business until appointed.

Premiums are held in trust, commingling is prohibited, and transaction records must be kept at least 3 years.

Section 626.9541 prohibits rebating, twisting, misrepresentation, false advertising, and unfair claim settlement practices.

FIGA pays insolvent insurers' covered claims up to $300,000 per claim with a $100 deductible; the Florida Hurricane Catastrophe Fund supplies hurricane reinsurance.

Personal lines require 45 days' notice of cancellation or nonrenewal (10 days for nonpayment); hurricane deductibles must be offered as $500 or 2%, 5%, or 10% of Coverage A.

2023 tort reform (HB 837) adopted modified comparative fault barring recovery above 50% fault and a 2-year negligence statute of limitations.