IN Property & Casualty common mistakes
IN Property & Casualty · Understand the traps and how to avoid them.
On coinsurance questions, multiplies the loss by the coinsurance percentage (e.g., computes 80% x $60,000 loss) instead of comparing the carried limit to the required limit.
The percentage sits in the same sentence as the loss amount, so it looks like a simple discount to apply to the payment; candidates skip the 'required insurance' step entirely.
What to do instead
Force three written steps every time: (1) required limit = coinsurance % x value of the property; (2) ratio = carried limit ÷ required limit, capped at 1.00; (3) payment = ratio x loss, minus deductible, never exceeding the policy limit.
Treats a claims-made liability policy as covering any injury that happened during the policy period, even when the claim is filed years later after the policy expired with no extended reporting period purchased.
The word 'occurrence' from prior study bleeds into claims-made analysis, and the two triggers sound interchangeable in casual reading.
What to do instead
Say the trigger out loud for each question: occurrence = injury/damage must occur during the period; claims-made = the wrongful act AND the claim (or report) must fall within the period or a purchased extended reporting period.
Assumes a lender named as mortgagee or loss payee on a property policy is also protected against liability claims arising from the premises.
Both appear as 'the bank' on the declarations page, so candidates assume one endorsement grants every kind of protection.
What to do instead
Memorize the split: mortgagee/loss payee endorsements protect only the lender's property interest (and its right to receive loss payments); liability protection requires adding the lender as an additional insured.
Places damaged property under the wrong homeowners coverage section, for example putting a detached garage or fence under Coverage C, or putting a neighbor's tree that fell on the lawn under Coverage A without checking the debris-removal sublimit.
The coverage lettering is memorized as a list rather than as a map of where things sit on the premises, so items get sorted by 'is it damaged' instead of 'where is it and what is it'.
What to do instead
Build a location-based map before answering: A = the dwelling structure itself; B = other structures on the residence premises; C = personal property wherever it normally sits; D = the increase in living expenses. Then apply any dollar sublimit inside the section.
Reads 'personal injury' in a commercial general liability policy as if it meant physical harm to a person, so libel, slander, false arrest, or invasion of privacy claims get placed under Coverage A.
The policy redefines a common English phrase, and the candidate answers from everyday usage rather than from the definition page.
What to do instead
Keep a two-column list in memory: Coverage A handles bodily injury and property damage; Coverage B handles the enumerated offenses (libel, slander, disparagement, false arrest, wrongful eviction, invasion of privacy). Any claim naming one of those offenses goes to B.
Uses 'risk', 'peril', and 'hazard' interchangeably in questions, for example calling a frayed extension cord a peril and a fire a hazard.
Everyday conversation uses all three words loosely, and the exam never signals that the terminology itself is what is being tested.
What to do instead
Attach one anchor example to each word and check it against the stem: peril = the cause of loss (fire, windstorm, theft); hazard = a condition that increases the chance or severity of loss (frayed cord, icy steps); moral hazard = dishonesty, morale hazard = carelessness; risk = the uncertainty itself.
Expects a claim to be paid even though the insured never signed and submitted a proof of loss, arguing that the insurer already had photographs and a police report.
Candidates reason from 'the company already knows what happened', treating post-loss duties as paperwork rather than as conditions the insured must satisfy.
What to do instead
Memorize the duties-after-loss list as a checklist (prompt notice, proof of loss, protect property from further damage, cooperate, submit to examination, provide records) and remember each carries a stated deadline in the form; noncompliance can bar or reduce recovery unless the insurer waives the requirement.
On Indiana negligence questions, selects 'pure comparative fault' or answers that any contributory fault by the injured party bars all recovery.
Most study material outside Indiana defaults to pure comparative or to traditional contributory negligence, and Indiana's version is a middle rule that is easy to blur.
What to do instead
Recite the Indiana rule precisely: modified comparative fault, with a 50% threshold. A claimant 50% or less at fault recovers damages reduced by their own percentage; at 51% or more, recovery is barred.
Cites 25/50/10 or 20/40/15 as Indiana's financial responsibility minimums for private passenger auto liability.
Older study guides and neighboring-state figures are still in circulation, and the property damage figure is the one that changed.
What to do instead
Lock in the current Indiana minimum: $25,000 bodily injury per person, $50,000 bodily injury per accident, and $25,000 property damage per accident (25/50/25).
Treats passing the state exam as the final step and assumes a newly licensed producer may begin soliciting immediately, or conversely assumes every office employee who answers the phone must hold a producer license.
The licensing sequence (exam, license, appointment) is learned as a jumble of steps with no fixed order, and the line between clerical and soliciting activity is never clearly drawn.
What to do instead
Fix the order: pass the exam, obtain the license from the Department, then have the appointing insurer file the appointment before any solicitation. Unlicensed clerical staff may handle routine office duties but may not discuss coverage, quote terms, or negotiate a policy.