GA Property & Casualty cheat sheet

McCarran-Ferguson Act (1945): the states primarily regulate the business of insurance; federal antitrust law applies only where state law does not reach the conduct.

An admitted insurer holds a certificate of authority from the state insurance department; a nonadmitted insurer holds none and may be placed only through surplus lines rules.

Georgia's Commissioner of Insurance is an elected statewide official who licenses insurers and agents, conducts market conduct examinations, and may suspend or revoke licenses.

Georgia resident property and casualty agents renew every two years and complete 24 hours of continuing education per term, including 3 hours of ethics.

Commissions and referral fees for the sale of insurance may be paid only to licensed persons; rebating any portion of a commission is prohibited.

Premiums collected on behalf of an insurer are held in a fiduciary capacity and may not be commingled with agency operating funds.

The NAIC is a voluntary association of state regulators that drafts model laws and forms and supports rate and form filing systems; it has no direct authority over any insurer.

Prohibited practices include misrepresentation, twisting, churning, false advertising, and unfair claim settlement practices; penalties range from fines to license revocation.

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

Principle of indemnity: the insured may not collect more than the amount of the actual loss, which is why most property claims settle at actual cash value unless replacement cost is endorsed.

Elements of a valid insurance contract: offer, acceptance, consideration, competent parties, and legal purpose.

Utmost good faith: a material misrepresentation or concealment on the application can allow the insurer to rescind the policy.

Aleatory contract means the values exchanged are unequal and contingent on an uncertain event; a contract of adhesion means the insurer drafts the wording and ambiguities are construed against the insurer.

Subrogation gives the insurer the insured's right of recovery against a negligent third party after paying the claim; the insured must not impair that right by releasing the third party.

A peril is the cause of loss; a hazard is a condition that increases the chance or severity of loss and may be physical, moral, or morale.

Law of large numbers: as the number of similar exposure units increases, actual losses more closely approach predicted losses, supporting rate adequacy.

Risk management sequence: identify exposures, measure them, select a treatment (avoid, retain, reduce, transfer), implement, then monitor.

Policy structure is DICE: Declarations, Insuring agreement, Conditions, Exclusions.

Coinsurance recovery = (insurance carried divided by insurance required) multiplied by the loss, then capped by the policy limit.

Actual cash value equals replacement cost minus depreciation; replacement cost coverage pays repair or replacement without deducting depreciation.

Named-peril forms require the insured to prove the loss came from a listed peril; open-peril (special) forms require the insurer to prove an exclusion applies.

Other insurance clauses take three common forms: pro rata by limits, contribution by equal shares, and primary versus excess ordering.

A mortgagee clause entitles the lender to loss payment to the extent of its interest and to advance notice of cancellation or nonrenewal.

Standard property conditions include duties after loss, appraisal, salvage, abandonment prohibited, and no benefit to bailee.

Vacancy permits vandalism, sprinkler leakage, and glass breakage to be excluded or restricted; unoccupancy may also limit coverage.

Additional coverages commonly include debris removal, preservation of property, and reasonable repairs made to protect property from further damage.

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

Compensatory damages split into special damages (medical bills, lost wages) and general damages (pain and suffering); punitive damages punish willful conduct and are commonly uninsurable.

Liability limits may be split (bodily injury per person, bodily injury per occurrence, property damage per occurrence) or written as a single combined single limit.

Strict liability applies to ultrahazardous activities, defective products, and wild animals, and requires no proof of negligence.

Vicarious liability holds one party responsible for another's acts, most commonly an employer for an employee acting within the scope of employment.

Common defenses include assumption of risk, modified comparative negligence, and the statute of limitations.

Medical payments coverage pays reasonable medical expenses regardless of fault, subject to a per-person limit.

Personal and advertising injury covers offenses such as libel, slander, false arrest, and invasion of privacy, which are distinct from bodily injury.

Defense costs may be inside or outside the limit depending on the form; supplementary payments are usually paid in addition to the limit.

Dwelling forms are DP-1 basic, DP-2 broad, and DP-3 special; the DP-3 insures the structure on an open-peril basis and personal property against named perils.

Eligible property includes one- to four-family dwellings, owner-occupied or rented to others, plus incidental occupancies such as up to five roomers or boarders.

Coverage amounts: A dwelling, B other structures at 10% of A, C personal property at 50% of A on most forms, and D fair rental value at 20% of A.

The DP-1 and DP-2 are named-peril forms; the DP-3 covers the dwelling and other structures for risks of direct physical loss unless excluded.

Dwelling policies contain no personal liability or medical payments coverage; those require the Coverage E and F endorsements.

An 80% coinsurance condition applies to Coverage A, so the insured bears the shortfall when the limit is below that percentage of value.

Vandalism and malicious mischief losses are excluded once the dwelling has been vacant more than 60 consecutive days.

Theft is not covered by the basic dwelling forms; a theft endorsement must be added.

Common exclusions include business pursuits, intentional loss, neglect, ordinance or law, earth movement, and water damage from flooding.

Homeowners forms are HO-2 broad, HO-3 special, HO-5 comprehensive, HO-4 renters, HO-6 condominium unit-owners, and HO-8 modified for older homes.

Coverage structure: A dwelling, B other structures at 10% of A, C personal property at 50 to 70% of A, D loss of use at 30% of A, E personal liability, F medical payments.

Section I is property coverage and Section II is liability and medical payments; insuring agreements, exclusions, and conditions are separately stated.

The HO-3 covers the dwelling open peril and personal property named peril; the HO-5 covers both on an open-peril basis.

Coverage C special limits apply to money, securities, theft of jewelry, theft of firearms, theft of silverware, and business property on and off premises.

Standard exclusions include earth movement, water damage and flood, ordinance or law, intentional loss, neglect, war, nuclear hazard, and business pursuits.

Duties after loss include prompt notice, protecting the property from further damage, cooperating with the insurer, and submitting proof of loss within 60 days.

Coverage D pays additional living expense and fair rental value while the residence premises is uninhabitable because of a covered loss.

Personal liability covers nonbusiness activities on and off the premises; a personal injury endorsement is needed for libel, slander, and false arrest.

PAP parts: A liability, B medical payments, C uninsured motorists, D damage to your auto, E duties after an accident, F general provisions.

Your covered auto includes listed autos, newly acquired autos (14 days if not a replacement), trailers, and temporary substitute autos.

Georgia minimum liability limits for private passenger autos are 25/50/25.

Georgia requires uninsured motorist coverage to be offered at limits equal to the liability limits, although the insured may select lower limits in writing.

Georgia requires at least $15,000 of personal injury protection, and named driver exclusions must be signed by the named insured.

Part D: collision pays for impact with another object or overturn; other than collision covers theft, fire, hail, and glass; both settle at actual cash value.

Exclusions include intentional acts, use as a public livery or delivery vehicle, racing, and vehicles furnished for the regular use of the insured.

Duties after an accident include prompt notice, cooperation, proof of claim, allowing inspection and appraisal, and mitigating further damage.

PAP liability follows both the covered auto and the insured driver, so a non-owned auto used with permission is generally covered.

The commercial package policy combines two or more coverage parts, such as commercial property and commercial general liability, under shared declarations and common conditions.

CGL Coverage A is bodily injury and property damage, Coverage B is personal and advertising injury, and Coverage C is medical payments.

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

Commercial property causes of loss forms are basic, broad, and special; the special form is open peril subject to stated exclusions.

Business income pays lost net income plus continuing normal expenses during the period of restoration, typically after a 72-hour waiting period.

CGL exclusions include expected or intentional injury, contractual liability (with listed exceptions), liquor liability, auto, aircraft, watercraft, pollution, and professional services.

Additional property coverages include debris removal, preservation of property, pollutant cleanup and removal, and increased cost of construction.

Blanket insurance applies a single limit across multiple locations or property categories; specific insurance states a separate limit for each item.

Equipment breakdown, builders risk, and difference in conditions are written separately or added by endorsement.

Workers compensation has three parts: Part One statutory benefits with no dollar limit, Part Two employer's liability, and Part Three other states coverage.

Benefits include unlimited medical care, temporary and permanent disability income, death benefits, and rehabilitation services.

The exclusive remedy doctrine means accepting statutory benefits generally bars the employee from suing the employer in tort for the same injury.

Georgia requires workers compensation coverage for employers with three or more regular employees.

Georgia uses a 7-day waiting period; if disability lasts 21 consecutive days, benefits are paid retroactively to the date of injury.

Premium = class rate per $100 of payroll multiplied by payroll divided by 100, then adjusted by the experience modification factor.

The experience modification compares the insured's loss experience with the class average; a modification below 1.00 produces a credit.

Classification is based on the governing class of the business and payroll is the exposure base; a premium audit at expiration adjusts the deposit premium.

Federal systems outside state acts include the Longshore and Harbor Workers' Compensation Act, the Federal Employers Liability Act, and the Jones Act.

The businessowners policy packages property, business income, and general liability coverage for eligible small businesses with simplified rating.

BOP property is usually written on a special open-peril form with limited exclusions, and business income includes up to 12 months of extended business income.

Ineligible BOP risks commonly include auto dealers, bars and drinking establishments, banks, and large or high-hazard manufacturing operations.

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

BOP liability resembles CGL occurrence coverage with a single aggregate covering bodily injury, property damage, personal and advertising injury, and medical expense.

Umbrella policies provide excess limits over underlying auto, general liability, and employers liability, and may drop down to fill coverage gaps.

Specialty lines include employment practices liability, directors and officers liability, professional liability (errors and omissions), and cyber liability.

Surety bonds are three-party agreements among the obligee, principal, and surety that guarantee performance rather than insuring against loss.

Inland marine covers property in transit and floater exposures, and the NFIP provides flood coverage in participating communities.