LA Property & Casualty cheat sheet

Pure risk involves only loss or no loss; speculative risk involves gain or loss and is generally uninsurable.

Insurable risks are fortuitous, definite, measurable, large in number, and not catastrophic to the insurer.

Property insurable interest must exist at time of loss; life insurable interest must exist at policy inception.

Indemnity restores pre-loss financial position; ACV and replacement cost are common valuation methods, and valued policies are exceptions.

Insurance contracts are contracts of adhesion, unilateral, conditional, personal, and require utmost good faith.

Agency authority may be express, implied, or apparent; apparent authority arises from the principal's conduct.

Subrogation transfers the insured's recovery rights to the insurer after payment, preventing double recovery.

Stock insurers are owned by shareholders; mutual insurers are owned by policyholders; reciprocal insurers are owned by subscribers.

Louisiana producers must be licensed by the Department of Insurance before soliciting, negotiating, or selling insurance.

A producer generally must be appointed by an insurer to act on its behalf; appointment authority is filed with the state.

Resident producers complete 24 continuing education hours every two years, including 3 hours of ethics.

Louisiana Insurance Guaranty Association covers covered claims of insolvent member property and casualty insurers, subject to statutory limits.

Unfair trade practices include misrepresentation, false advertising, rebating, illegal inducement, coercion, and unfair discrimination.

Unfair claim settlement practices include misrepresenting policy provisions, failing to investigate promptly, and offering less than owed.

Producers owe fiduciary duties for premiums collected; commingling premium funds with personal or general business funds is prohibited.

Licensees must report certain administrative actions, criminal prosecutions, and address changes to the Department within required timeframes.

Louisiana is a tort auto liability state and requires proof of financial responsibility; it does not use no-fault for private passenger auto.

A property policy contains declarations, insuring agreement, conditions, exclusions, and definitions; endorsements modify the base form.

Coverage limits may be specific, scheduled, blanket, per-occurrence, or aggregate; sublimits cap particular property classes.

Coinsurance applies when the limit carried is less than the required percentage of value at risk.

Coinsurance formula: (insurance carried ÷ insurance required) × loss, not exceeding the policy limit.

ACV equals replacement cost minus depreciation; replacement cost pays new property without depreciation, subject to policy conditions.

Percentage deductibles apply to a limit such as the dwelling or building amount, not to the loss amount.

Common exclusions include flood, earth movement, nuclear hazard, intentional loss, neglect, wear and tear, and ordinance or law.

A mortgagee clause gives the lender rights to loss payment and notice of cancellation or nonrenewal.

Other insurance, appraisal, salvage, and pair-or-set provisions determine how multiple policies and partial losses are handled.

HO-3 covers the dwelling 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, liability, and medical payments, but not the building.

HO-6 condominium covers unit interiors, improvements, personal property, loss of use, and limited loss assessments.

Typical HO-3 limits: Coverage B other structures 10% of A, Coverage C personal property 50% of A, Coverage D loss of use 30% of A.

Standard HO liability limits are commonly Coverage E at $100,000 and Coverage F medical payments at $1,000, unless endorsed.

Dwelling replacement cost settlement often requires insurance at least 80% of replacement cost; otherwise ACV or reduced settlement applies.

Special limits apply to cash, jewelry theft, firearms theft, silverware theft, securities, and business property.

Flood is excluded; NFIP or private flood coverage is separate and generally has a 30-day waiting period.

Louisiana homeowners policies commonly apply separate percentage deductibles for named storms or hurricane wind.

Commercial property forms cover building, business personal property, and personal property of others; causes of loss may be basic, broad, or special.

Coinsurance, agreed value, and reporting forms affect recovery; a margin clause can cap recovery at a percentage of reported values.

Business income covers net income plus continuing expenses during restoration; extra expense covers costs to resume operations.

Civil authority, extended business income, and contingent business interruption are separate extensions with specific time limits.

Inland marine covers property in transit, bailee property, contractor equipment, motor truck cargo, and other mobile property.

Crime forms include employee dishonesty, forgery, robbery, safe burglary, and theft; discovery versus occurrence triggers differ.

Equipment breakdown covers electrical or mechanical failure, boiler explosion, spoilage, and related business income loss.

Commercial property exclusions commonly include flood, earth movement, wear and tear, faulty workmanship, and ordinance or law.

Negligence requires duty, breach, proximate cause, and damages; res ipsa and negligence per se are alternate proof theories.

Compensatory damages include special damages such as medical bills and lost wages, and general damages such as pain and suffering.

Punitive damages may be awarded for gross or intentional misconduct where permitted by law.

Louisiana uses comparative fault, reducing a plaintiff's recovery by the plaintiff's percentage of fault.

Policy limits may be split, combined single, per occurrence, or aggregate; defense costs may be inside or outside limits.

Occurrence policies respond to injury or damage during the policy period; claims-made policies respond to claims first made during the period.

Vicarious liability holds one party responsible for another's acts, such as an employer for an employee acting within scope.

Common defenses include no duty, comparative fault, assumption of risk, statute of limitations, and immunity.

Louisiana minimum liability limits are 15/30/25: $15,000 per person, $30,000 per accident bodily injury, and $25,000 property damage.

Louisiana requires uninsured/underinsured motorist coverage to be offered; a signed written rejection is required to decline it.

Louisiana is a tort liability state; private passenger auto does not use a no-fault PIP system.

No Pay No Play limits noneconomic damage recovery for uninsured drivers involved in accidents.

Personal auto policy coverages include liability, medical payments, UM/UIM, collision, and other than collision.

PAP exclusions include intentional acts, racing, use as a public livery, and business use not covered by endorsement.

Commercial auto uses covered auto symbols to designate which vehicles and exposures are insured.

MCS-90 is a financial responsibility endorsement for certain commercial carriers and can override policy exclusions.

CGL Coverage A covers bodily injury and property damage caused by an occurrence; Coverage B covers personal and advertising injury.

CGL limits include each occurrence, general aggregate, products-completed operations aggregate, and personal/advertising injury aggregate.

Products-completed operations coverage applies to injury or damage arising from the insured's products or completed work away from the premises.

Common CGL exclusions include expected or intended injury, contractual liability, your work, your product, impaired property, and pollution.

Additional insured endorsements extend status to parties such as landlords or general contractors; primary and noncontributory wording affects order.

Umbrella and excess policies provide limits above underlying coverage; umbrella may drop down, excess generally follows form.

Professional liability covers errors and omissions and is commonly claims-made with a retroactive date.

Employment practices liability covers wrongful termination, discrimination, harassment, and retaliation, usually claims-made.

Workers compensation is no-fault and provides statutory medical, indemnity, and death benefits for work-related injury or disease.

Exclusive remedy bars most employee tort suits against the employer, except for intentional acts or other statutory exceptions.

Indemnity benefits include temporary total, temporary partial, permanent partial, permanent total, and death benefits.

Louisiana generally requires employers with one or more employees to carry workers compensation coverage, subject to statutory exceptions.

Benefits are based on average weekly wage and subject to statutory maximum and minimum weekly rates.

Employer's liability coverage responds to certain third-party or dual-capacity claims not covered by workers compensation benefits.

Premium uses payroll by classification, experience modification, and audits; experience mod compares actual to expected losses.

Coverage may be extended to other states by endorsement; monopolistic state funds require separate coverage.