NV Property & Casualty common mistakes
NV Property & Casualty · Understand the traps and how to avoid them.
Cites the NAIC as the body that licenses, examines, or revokes a Nevada producer's license, or quotes a model Act/regulation as if it were automatically Nevada law.
Study outlines are built on NAIC model laws and model regulation text, so the candidate memorises the model's content but never separates 'model' from 'adopted Nevada rule' - the two look identical on the page.
What to do instead
Hold one anchor line per regulation topic: NAIC = drafts model laws, publishes model exams, coordinates among states, has NO direct regulatory authority over any producer. Nevada Division of Insurance, headed by the Insurance Commissioner, licenses, examines, fines, and revokes. Before answering, silently ask: 'model body or Nevada regulator?'
Picks 'contribution' when the vignette describes an insurer paying its insured and then pursuing the at-fault driver, and picks 'subrogation' when two policies at the same level each cover the same loss.
Subrogation, contribution, other insurance, and reinsurance are taught back-to-back as 'loss-sharing' concepts, so the labels blur and the candidate answers on feel.
What to do instead
Tie each term to its actors: subrogation = insurer vs. the wrongdoer (steps into the insured's shoes); contribution = insurer vs. insurer, same insured, same loss; other insurance clauses = how the split is calculated; reinsurance = insurer vs. insurer for the insurer's own exposure. If a third party caused the loss, the answer is subrogation.
Computes a coinsurance loss payment by subtracting the deductible from the loss, or by multiplying the loss by the coinsurance percentage (e.g., 80% × $100,000 loss = $80,000).
Coinsurance is mentally filed as a 'percentage discount', when it is actually a ratio test that only bites when the limit is below the required amount.
What to do instead
Use the fixed three-step drill: (1) required limit = coinsurance % × replacement cost at time of loss; (2) if the limit carried is less, payment = (limit carried ÷ required limit) × loss; (3) cap at the policy limit, then subtract the deductible. If the limit equals or exceeds the required amount, step 2 is skipped entirely - no penalty exists.
Answers that a plaintiff 20% at fault recovers nothing, and then in the next question answers that a plaintiff in a contributory-negligence jurisdiction recovers damages reduced by their percentage of fault.
The candidate learns both doctrines in the same sitting and collapses them into a single fuzzy rule about 'fault reducing recovery'.
What to do instead
Memorise as a two-line rule with a bar/no-bar test: contributory negligence = any fault by the plaintiff bars recovery completely; pure comparative negligence = recovery reduced by plaintiff's percentage, never barred; modified comparative = barred at a stated threshold (50% or 51%). Then check whose rule the question puts you in before touching the numbers.
Selects a DP-2 or DP-3 as automatically providing personal liability, medical payments to others, or theft coverage, and answers that Coverage C on a dwelling policy is 50% of Coverage A because that is the homeowners figure.
Dwelling and homeowners forms share the same Coverage A–E lettering, so the candidate transfers the homeowners structure wholesale.
What to do instead
Lock in the core structural difference: dwelling forms are property-only - liability, medical payments to others, and theft come only by endorsement or a separate policy. And the dwelling Coverage C default is 10% of Coverage A (subject to a stated minimum), not the 50% used on HO-3/HO-5.
Applies open-perils ('special form') coverage to the contents on an HO-3, or assumes every homeowners form uses the same Coverage B/C/D percentages of Coverage A.
The candidate remembers 'HO-3 is the special form' as a single label and does not split the form into structure vs. personal property perils.
What to do instead
Recite the split every time: HO-3 = open perils on the dwelling, broad named perils on personal property; HO-5 = open perils on both; HO-2 = broad named perils on both. Then recall the HO-3/HO-5 percentages (B = 10%, C = 50%, D = 30% of Coverage A) and note that the HO-8 is the outlier using functional replacement cost and different percentages - never blend them. Also memorise the short special-limits table (e.g., $200 money, $1,500 theft of jewelry) because those limits override Coverage C.
Treats a car borrowed from a neighbour or employer and driven for months as a covered 'non-owned auto', and treats a newly purchased additional vehicle as automatically covered no matter how long the insured waits to report it.
The PAP's broad 'any auto' wording for the named insured feels unlimited, and the newly acquired auto rule is remembered only as 'you get some time', without the additional-vs-replacement distinction or the day count.
What to do instead
Two checks on every PAP question: (1) Did the insured have regular use of the vehicle? If yes, the non-owned auto exclusion applies - no coverage. (2) Is the new vehicle a replacement or an additional auto, and what is the day window (14 days for an additional auto; a replacement generally carries broader automatic coverage)? State the day count explicitly before choosing.
Assumes a claims-made liability policy responds to a loss that occurred before the retroactive date, or assumes the 'special' causes-of-loss form means a longer list of named perils rather than open perils subject to exclusions.
The CPP is modular, and candidates learn the module names without learning what each choice actually changes on the trigger or the burden of proof.
What to do instead
Fix the trigger question first: occurrence form = the date of injury/damage; claims-made = the date the claim is made, and only if the occurrence is on or after the retroactive date. For causes of loss, remember basic = named perils list, broad = basic plus breakage-type perils, special = open perils with the burden on the insurer to prove an exclusion applies.
Assumes the businessowners policy can be written for any business and automatically supplies workers' compensation, commercial auto, or professional liability.
The BOP is marketed as a one-stop small-business package, so the candidate skips the eligibility screens and the list of coverages that are simply not in the form.
What to do instead
Before choosing a BOP answer, run the eligibility screen (eligible class of business, building height and square-footage caps, occupancy and sales limits) and state what the BOP actually bundles: property, general liability, and business income with extra expense. Workers' compensation, commercial auto, and professional/E&O exposures require separate policies or endorsements - never assume they are inside the BOP.
Selects a dollar amount (e.g., $1,000,000) as the limit for Part One of the workers' compensation policy, or answers that an injured worker may both collect workers' compensation benefits and sue the employer in tort for the same injury.
Every other liability coverage in the exam is limit-driven, so the candidate applies a limits habit to a coverage that has none, and the exclusive remedy doctrine gets remembered as a soft 'usually you can't sue'.
What to do instead
Separate the three parts by what limits them: Part One (workers compensation) pays whatever the statute requires - no dollar limit and no deductible; Part Two (employer's liability) carries per-accident, per-employee-disease, and policy-limit figures; Part Three covers other states. Then state the exclusive remedy rule affirmatively: workers' compensation is the employee's exclusive remedy against the employer, with only narrow exceptions such as intentional torts.