MN Property & Casualty cheat sheet

Minnesota insurance is regulated by the Minnesota Department of Commerce; the Commissioner licenses producers, approves policy forms, and examines insurer solvency and market conduct.

A Minnesota producer license renews biennially and requires 24 continuing education credit hours per two-year term, including at least 3 hours of ethics.

The appointing insurer, not the producer, files appointments with the Commissioner; appointment and termination notices must be reported within 30 days.

Premiums collected from insureds are held in a fiduciary capacity; commingling premium funds with personal or general business funds is prohibited.

Twisting is misrepresenting an existing policy to induce a lapse or replacement, and rebating is offering an inducement not stated in the policy; both are prohibited unfair trade practices.

Minnesota minimum auto liability limits are 30/60/10: $30,000 per person and $60,000 per accident for bodily injury, plus $10,000 for property damage.

Minnesota no-fault requires at least $40,000 in personal injury protection ($20,000 medical expense plus $20,000 for wage loss and essential services).

Uninsured/underinsured motorist coverage must be offered at limits equal to the auto liability limits and may be rejected only by a signed written waiver.

The Minnesota Insurance Guaranty Association pays covered claims of insolvent property and casualty insurers, generally up to $300,000 per claim and $100,000 for return of unearned premium.

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

Insurance contract characteristics: contract of adhesion, aleatory, unilateral, conditional, personal, and governed by utmost good faith.

Insurable interest in property insurance must exist at the time of loss; in life insurance it must exist at policy inception.

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

A representation is a statement believed true; to void coverage a misrepresentation must be material to the insurer's acceptance of the risk.

Concealment is intentional silence about a material fact; a warranty is a statement the insured guarantees to be true.

Waiver is the voluntary relinquishment of a known right; estoppel bars a party from asserting a right after inducing another's reliance.

Subrogation transfers the insured's right of recovery against a negligent third party to the insurer after the claim is paid.

The law of large numbers allows insurers to predict losses from large groups; adverse selection is the tendency of higher-risk insureds to seek coverage.

The HO-3 covers the dwelling and other structures on an open-perils basis but covers personal property for named perils only.

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

ISO HO-3 baseline liability limits are $100,000 for Coverage E personal liability and $1,000 for Coverage F medical payments to others.

Common HO-3 special limits: $200 money, $1,500 securities, $1,500 jewelry theft, $2,500 firearms theft, and $2,500 silverware theft.

Replacement cost on Coverage A and B requires insuring to at least 80% of full replacement cost; a lower limit reduces the claim payment proportionally.

Coinsurance settlement formula: (limit carried / limit required) x loss, then subtract the deductible.

Homeowners forms by occupancy: HO-2 broad form, HO-3 special form, HO-5 comprehensive form, HO-4 renters, HO-6 condominium unit owners, HO-8 modified form for older homes.

Flood, surface water, and earth movement are excluded under homeowners forms; coverage requires a separate flood policy or a specific endorsement.

The property deductible applies to Coverage A through D losses but never reduces Coverage E or Coverage F liability payments.

Personal auto policy parts: Part A liability, Part B medical payments, Part C uninsured/underinsured motorists, and Part D coverage for damage to your auto.

Under the PAP, a newly acquired auto is covered for 14 days if the insurer is not notified, and automatically if it replaces a vehicle already on the policy.

Standard PAP exclusions: intentional acts, racing, livery or for-hire use, and vehicles used for delivery or business not shown on the policy.

CGL Coverage A pays bodily injury and property damage caused by an occurrence; Coverage B pays personal and advertising injury; Coverage C pays medical expenses regardless of fault.

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

A claims-made CGL policy responds to claims first made during the policy period, and the retroactive date bars coverage for acts occurring before that date.

Workers compensation Part One pays statutory benefits; Part Two employer's liability covers the employer's tort liability for employee injuries.

An umbrella policy pays above underlying limits after they are exhausted and may drop down to cover exposures excluded by primary policies, subject to a self-insured retention.

A businessowners policy (BOP) packages property and general liability coverage for small businesses, typically with business income and optional endorsements.

Policy structure follows DICE: Declarations, Insuring agreement, Conditions, and Exclusions, supported by Definitions.

Duties after loss include prompt notice, protecting the property from further damage, submitting a proof of loss, cooperating, and submitting to examination under oath.

Pro rata cancellation returns the full unearned premium and is used when the insurer cancels; short rate cancellation returns less than the unearned premium and is used when the insured cancels.

A mortgagee or loss payable clause protects the lender's interest, requiring loss payment to the lender and notice of cancellation or nonrenewal.

Other insurance conditions resolve overlapping coverage as primary, excess, or pro rata contribution among the policies.

A liberalization clause automatically extends any broader coverage the insurer later adopts, at no additional premium, to policies already in force.

Vacancy of a dwelling beyond 60 consecutive days suspends vandalism and certain theft and glass coverage in homeowners forms.

Appraisal resolves disputes over the amount of loss; arbitration resolves disputes when the policy makes it a condition of coverage.

An endorsement amends the base policy and prevails over conflicting policy language; additional insured status is added by endorsement.