ND Property & Casualty cheat sheet

The North Dakota Insurance Department, headed by the Insurance Commissioner, administers state insurance law, issues licenses, and takes enforcement action against producers and insurers.

A producer must hold a license for each line solicited; common lines include property, casualty, personal lines, life, and accident and health.

An insurer appoints a producer by filing appointment information with the state; the producer may represent the appointing insurer for authorized lines.

Producers must not commingle premium funds with personal or general business funds and must account for premiums and return premiums as a fiduciary.

Unfair trade practices include misrepresentation, twisting, rebating, coercion, false advertising, and unfair or deceptive claim settlement acts.

The commissioner may issue cease-and-desist orders, fines, probation, suspension, or revocation for violations of insurance laws or regulations.

Continuing education is required for producer license renewal; the state sets approved course hours, reporting deadlines, and exemptions.

A producer must keep license information current and respond accurately to regulatory inquiries and application questions.

Insurable interest requires a financial stake: property insurance requires it at the time of loss, while life insurance generally requires it at policy inception.

The indemnity principle restores the insured to pre-loss financial condition; policy limits, deductibles, and valuation methods determine the amount.

Insurance is a contract of utmost good faith; material misrepresentations or concealment can allow the insurer to rescind or deny coverage.

An aleatory contract has unequal exchange of value depending on events; a contract of adhesion is drafted by the insurer, so ambiguities are construed against the drafter.

Risk pooling spreads losses among many exposures; the law of large numbers helps insurers predict losses as the number of similar risks increases.

A peril is the cause of loss, such as fire or theft; a hazard is a condition that increases the chance or severity of loss.

Moral hazard involves dishonesty or intentional conduct; morale hazard involves carelessness; physical hazard is a tangible condition.

Actual cash value equals replacement cost minus depreciation; replacement cost pays to repair or replace without depreciation, subject to policy terms.

The coinsurance formula for property is insurance carried divided by insurance required, multiplied by the loss, then adjusted for deductible and limit.

Property policies insure covered property against covered causes of loss, subject to exclusions, limits, deductibles, and conditions.

Direct loss is damage to property; indirect loss includes lost income, extra expense, or loss of use following a covered direct loss.

Actual cash value reflects depreciation; replacement cost does not deduct depreciation but may require repair or replacement and a sufficient limit.

A coinsurance clause requires insurance equal to a specified percentage of value; failing that percentage reduces the claim by the ratio of carried to required insurance.

An agreed value provision can suspend coinsurance when the insured and insurer agree on the property value before loss.

A mortgagee clause gives the lender rights to loss payment and notice, and the lender may pay premiums or take other action to protect its interest.

Pair-and-set provisions address loss to part of a set; debris removal and preservation of property coverages respond to specified post-loss expenses.

Blanket coverage applies one limit across multiple locations or property categories; specific coverage assigns separate limits to each item.

Exclusions commonly include earth movement, water damage, neglect, intentional loss, and ordinance or law, unless endorsed.

Liability insurance pays sums the insured is legally obligated to pay as damages because of bodily injury or property damage, plus defense costs as the policy provides.

Bodily injury includes physical injury, sickness, or disease; property damage includes physical injury to tangible property and loss of use.

Negligence requires a duty, breach of that duty, causation, and damages; liability policies respond when the insured is legally liable.

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

An occurrence policy responds to injury or damage that happens during the policy period; a claims-made policy responds to claims first made during the period, subject to any retroactive date.

Limits may be split by occurrence and aggregate, or combined single limits; defense costs are usually inside the limit unless supplementary payments apply.

Additional insured endorsements extend liability coverage to another party; certificates of insurance summarize coverage but do not amend the policy.

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

Punitive damages may be excluded or restricted; policies often cover compensatory damages but not fines, penalties, or punitive awards.

Dwelling policies cover a dwelling and related structures and are written in DP-1 basic, DP-2 broad, and DP-3 special forms.

DP-1 and DP-2 use named perils; DP-3 generally provides open-perils coverage on the dwelling and other structures, with personal property often named perils.

Dwelling coverage parts commonly include the dwelling, other structures, personal property, fair rental value, and additional living expense.

Basic dwelling property forms do not automatically provide personal liability; a personal liability endorsement may be added.

Dwelling policies are designed for residential occupancies, including owner-occupied and rented dwellings, subject to eligibility rules in the form.

Fair rental value pays lost rental income when a covered loss makes the dwelling uninhabitable; additional living expense pays increased living costs.

Vacancy and unoccupancy conditions can reduce or suspend coverage for vandalism, theft, freezing, or water damage after specified periods.

Dwelling claims may be settled at actual cash value or replacement cost, depending on the form and endorsements; deductibles apply to property losses.

Common exclusions include earth movement, flood, neglect, intentional loss, and ordinance or law, unless coverage is added.

Homeowners forms include HO-2 broad named perils, HO-3 special dwelling, HO-5 comprehensive, HO-4 renters, HO-6 condominium, and HO-8 modified for older homes.

Section I coverages are dwelling, other structures, personal property, and loss of use; Section II coverages are personal liability and medical payments to others.

HO-3 insures the dwelling and other structures on an open-perils basis and personal property for named perils, unless endorsements change the basis.

Medical payments coverage pays reasonable medical expenses to others regardless of fault, subject to per-person limits; liability coverage responds to legal liability.

Loss of use pays additional living expense and fair rental value when a covered loss makes the residence premises uninhabitable, subject to limits and conditions.

Section I deductibles apply to property losses; Section II liability and medical payments generally do not have a deductible.

Common property exclusions include earth movement, water damage, neglect, intentional loss, ordinance or law, and business exposures.

Special limits apply to certain personal property such as money, jewelry, silverware, and firearms; scheduled endorsements can increase coverage.

A mortgagee clause protects the lender's interest by providing loss payment rights and notice of cancellation or nonrenewal.

A personal auto policy includes liability, medical payments, uninsured motorist, and physical damage coverages, plus definitions, exclusions, and duties after loss.

Part A liability covers damages for bodily injury and property damage to others caused by an insured's use of a covered auto, with defense costs as provided.

Split limits state separate maximums for bodily injury per person, bodily injury per accident, and property damage per accident; a combined single limit uses one maximum.

Medical payments coverage pays reasonable medical expenses for the insured and passengers, regardless of fault, subject to policy limits.

Uninsured motorist coverage responds to bodily injury caused by an uninsured or hit-and-run driver, subject to policy terms and state requirements.

Covered autos include owned autos listed on the policy, newly acquired autos for a specified period, temporary substitute autos, and non-owned autos as defined.

Exclusions commonly include intentional acts, racing, using a vehicle without permission, regular use of a non-owned auto, and certain business uses.

Physical damage coverage includes collision and other than collision; claims are settled at actual cash value or repair cost, subject to the deductible.

North Dakota financial responsibility law requires drivers to maintain liability insurance or other proof of financial responsibility; minimum limits are set by statute.

Commercial package policies combine commercial property coverage with general liability and may add crime, inland marine, or equipment breakdown.

Commercial property covers building, business personal property, and personal property of others, subject to coverage forms, limits, and deductibles.

Causes of loss forms include basic, broad, and special; the special form covers risks of direct physical loss unless excluded.

Commercial property coinsurance requires a limit equal to a stated percentage of value; a lower limit reduces the loss payment proportionately.

Agreed value can suspend coinsurance when the insured and insurer agree on the covered property value before loss.

Business income coverage replaces lost net income and continuing expenses during the period of restoration; extra expense pays costs to resume operations.

Blanket insurance applies one limit across multiple locations or property categories; specific insurance assigns separate limits to each.

Common commercial property exclusions include earth movement, flood, government action, neglect, and ordinance or law, unless endorsed.

Replacement cost coverage pays to repair or replace without depreciation, while actual cash value deducts depreciation.

Commercial general liability Coverage A covers bodily injury and property damage for which the insured is legally liable because of an occurrence.

Coverage B covers personal and advertising injury offenses such as libel, slander, and wrongful eviction; Coverage C provides medical payments.

CGL limits include each occurrence, general aggregate, products-completed operations aggregate, and damage to premises rented to you.

An occurrence form covers injury or damage that happens during the policy period; a claims-made form covers claims first made during the period, subject to any retroactive date.

Common CGL exclusions include expected or intended injury, contractual liability, liquor liability, auto liability, workers compensation, and professional liability.

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

Additional insured endorsements extend coverage to another party; the endorsement wording controls the scope and limits of that additional coverage.

Defense costs are generally paid inside the limit of liability unless the policy or an endorsement provides otherwise.

The employers liability exclusion in CGL removes coverage for bodily injury to employees arising out of employment, leaving workers compensation and employers liability to respond.

Workers compensation is a no-fault statutory system paying medical, disability, death, and rehabilitation benefits for work-related injury or disease.

The exclusive remedy principle generally limits an employee's recovery against the employer to workers compensation benefits, except for intentional acts or other statutory exceptions.

Part One of a workers compensation policy provides workers compensation benefits as required by statute; Part Two provides employers liability coverage.

Employers liability limits are commonly stated per accident, per employee for disease, and as a policy aggregate for disease.

Premium is based on classification, payroll, and experience modification, and is subject to audit at policy expiration.

North Dakota's workers compensation system is administered by Workforce Safety & Insurance, a state agency; coverage is generally obtained through WSI rather than private carriers.

Sole proprietors, partners, and certain LLC members may elect or be excluded from coverage depending on state law and the policy.

Independent contractors are generally not employees for workers compensation, but misclassification can create liability and penalties.

Workers compensation coverage is territorial; a policy must list the states where coverage applies, and benefits vary by state.