ME Property & Casualty cheat sheet

Only pure risk (loss or no loss) is insurable; insurable risks need many similar exposure units, accidental and measurable loss, a calculable expected loss, and no catastrophic concentration of loss.

Principle of indemnity: recovery cannot exceed the actual financial loss; actual cash value = replacement cost minus depreciation.

Insurable interest timing: property insurance requires insurable interest at the time of loss; life insurance requires it at the time of application.

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

Policy characteristics: contract of adhesion (insurer drafts, ambiguities construed against the insurer), conditional, unilateral, aleatory, and personal.

Utmost good faith: a material misrepresentation or concealment permits the insurer to void the contract; a warranty must be literally satisfied.

Producer authority: express (written in the agency contract), implied (customary to the position), and apparent (insurer-created appearance binds the insurer).

Hazard types: physical (icy steps, faulty wiring), moral (dishonest intent to cause or exaggerate loss), and morale (carelessness or indifference).

Property coinsurance penalty: (limit carried divided by limit required) times the loss equals the payment, never exceeding the policy limit.

Homeowners Section I: Coverage A Dwelling, B Other Structures, C Personal Property, D Loss of Use; Section II: Coverage E Personal Liability, F Medical Payments to Others.

HO-3 insures the dwelling on an open-perils basis and personal property on a named-perils basis; HO-5 is open perils for both; HO-4 and HO-6 cover tenants' property and liability only.

Standard homeowners special limits include $200 money, $1,500 securities, $1,500 theft of jewelry and furs, $2,500 theft of firearms, and $2,500 theft of silverware.

Coverage D pays additional living expense and fair rental value during the time reasonably needed to repair or replace, usually capped as a percentage of the Coverage A limit.

Commercial coinsurance formula: (insurance carried divided by insurance required) times the loss equals recovery, where insurance required is the coinsurance percentage times value at time of loss.

Causes of loss forms: Basic and Broad use named perils; Special is open perils and pays all direct physical loss unless an exclusion applies.

Business income equals net income plus continuing operating expenses for the period of restoration; extra expense funds costs incurred to shorten that period.

Common property exclusions: earth movement, flood and surface water, ordinance or law, neglect, intentional loss, war, nuclear hazard, and power failure.

Agreed value and blanket forms neutralize the coinsurance clause by fixing the limit at policy inception or applying one limit across multiple locations.

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

Occurrence trigger is the date of injury or damage; claims-made trigger is the date the claim is first made or reported, limited by the retroactive date.

CGL core exclusions: expected or intentional injury, contractual liability, pollution, autos, aircraft and watercraft, employee injury, damage to your product, and damage to your work.

Personal and advertising injury covers libel, slander, false arrest, detention, malicious prosecution, wrongful eviction, invasion of privacy, and copyright infringement in an advertisement.

Personal auto policy parts: A Liability, B Medical Payments, C Uninsured/Underinsured Motorists, D Coverage for Damage to Your Auto (collision and other than collision).

Maine auto minimums: $50,000/$100,000 bodily injury, $25,000 property damage, uninsured motorists at the bodily injury limits, and medical payments of at least $2,000.

Workers compensation is the exclusive remedy for work-related injury; statutory benefits are medical care, disability income, rehabilitation, and death benefits.

Umbrella and excess policies sit above underlying limits, may drop down to fill coverage gaps, and typically apply a self-insured retention when they do.

Professional liability (errors and omissions) covers negligent acts, errors, or omissions in professional services; D&O and EPLI address management and employment exposures.

The Maine Bureau of Insurance, headed by the Superintendent of Insurance, licenses insurers and producers and enforces Title 24-A, the Maine Insurance Code.

Maine resident producer licenses require a passing exam, insurer appointment, biennial renewal, and 24 continuing education hours every two years including 3 hours of ethics.

Maine motor vehicle liability minimums are 50/100/25: $50,000 per person and $100,000 per accident for bodily injury, and $25,000 for property damage.

Maine requires uninsured motorist coverage at the bodily injury limits and medical payments coverage of at least $2,000 on every auto policy.

Maine workers compensation coverage is mandatory for employers with one or more employees; sole proprietors are excluded unless they elect coverage.

Prohibited unfair trade practices include misrepresentation, false advertising, twisting, coercion, and rebating of premiums or unstated inducements.

A producer holding premium in a fiduciary capacity may not commingle those funds with personal or general business funds.

The Maine Insurance Guaranty Association pays covered claims of insolvent admitted property and casualty insurers, subject to statutory caps and deductibles.

Cancellation or nonrenewal requires written notice stating the reason; required notice periods and permissible reasons vary by line of insurance.