HI Property & Casualty cheat sheet

Risk is uncertainty about loss; pure risk offers only loss or no loss, while speculative risk can produce gain or loss.

Insurable risks are generally accidental, measurable, definite in time and amount, spread over many similar exposures, and lawful.

The principle of indemnity restores the insured to approximately the pre-loss financial position and discourages profit from loss.

Insurable interest is a financial stake in the subject; property insurance requires it at the time of loss, life insurance at application.

Utmost good faith requires honest disclosure; material misrepresentation, concealment, or breach of warranty can affect coverage.

An insurance policy is a contract of adhesion; ambiguity is construed against the insurer that drafted the policy.

Subrogation lets the insurer recover paid losses from the responsible party after indemnifying the insured, preventing double recovery.

Negligence requires duty, breach, proximate cause, and damages; all four elements must be shown for liability.

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

Coinsurance recovery = (insurance carried ÷ insurance required) × loss, capped by the policy limit; required amount = coinsurance percentage × replacement cost.

Named perils policies cover only listed causes; open perils policies cover all causes except those excluded.

HO-3 covers the dwelling on an open perils basis and personal property on a named perils basis; HO-5 uses open perils for both.

Deductibles apply per occurrence; separate hurricane, wind, or hail deductibles may be stated as a dollar amount or percentage.

Flood and earthquake are usually excluded and require separate policies or endorsements.

A mortgagee clause protects the lender's interest and may require notice of cancellation or nonrenewal.

Business income covers lost net income and continuing expenses; extra expense pays costs to continue operations after a loss.

CGL occurrence forms cover injury or damage during the policy period; claims-made forms cover claims first made during the period, subject to retroactive date.

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

Products liability addresses injury or damage after a product leaves the insured's control; completed operations addresses work after completion.

Auto liability pays third-party bodily injury and property damage; collision covers the insured vehicle; comprehensive covers non-collision losses.

No-fault PIP pays specified medical and wage-loss benefits regardless of fault, subject to policy limits.

Uninsured and underinsured motorist coverage responds when a negligent driver lacks sufficient liability insurance.

Workers compensation provides medical, disability, death, and rehabilitation benefits, generally with exclusive remedy against the employer.

Umbrella policies provide excess limits above underlying policies and may broaden coverage for some exposures.

The Hawaii Insurance Division, within DCCA, regulates insurers and producers; the Insurance Commissioner is appointed by the Governor.

A producer must hold a Hawaii license to solicit, negotiate, sell, or service insurance for compensation; nonresidents may qualify by reciprocity.

Hawaii producers must complete continuing education each biennial license term, including an ethics component.

Unfair trade practices include misrepresentation, false advertising, unfair discrimination, rebating, twisting, and illegal inducements.

Rebating offers something of value not stated in the policy to induce a sale; it is prohibited.

Hawaii's no-fault auto law requires PIP benefits and limits tort claims unless specified injury thresholds are met.

The Hawaii Property Insurance Association is a residual market providing basic property coverage when voluntary market coverage is unavailable.

Surplus lines coverage is placed with unauthorized insurers only through a licensed surplus lines broker after a diligent search.

The Commissioner may examine insurers, issue orders, suspend or revoke licenses, and impose fines for violations.