NY Property & Casualty common mistakes
NY Property & Casualty · Understand the traps and how to avoid them.
Memorizing one notice period (usually 10 days) and applying it to every New York cancellation, nonrenewal, and conditional renewal scenario.
Exam prep summaries collapse several statutes into a single number, and candidates rehearse the shortest period most often because it is easiest to recall.
What to do instead
Build a matrix by policy type (auto, commercial property, homeowners) and event (nonpayment, other cancellation, nonrenewal, conditional renewal, midterm premium increase) with the exact day counts. Recite the matrix aloud until the correct period is automatic.
Calculating a coinsurance penalty as limit minus deductible, or applying the penalty to the deductible instead of the loss.
The formula has several steps, and the deductible feels like part of the 'amount of insurance' because it reduces what the insurer pays.
What to do instead
Use a fixed three-line worksheet: required insurance = coinsurance percentage × value; ratio = limit ÷ required (capped at 1.0); payment = (ratio × loss) − deductible. Practice with a limit above the required amount to confirm no penalty applies.
Treating policy limits as reduced by the deductible and by every partial payment, instead of applying the deductible per occurrence or per claim.
Everyday deductibles on auto and health policies work differently, so candidates carry over the wrong mental model.
What to do instead
For each coverage, write 'limit' and 'deductible trigger' side by side. Work through three separate losses in one policy period and track that the limit remains unchanged while the deductible applies to each loss.
Applying Coverage C special limits for jewelry, silverware, money, and similar items as amounts that add to the Coverage C limit rather than sublimits inside it.
The form lists dollar amounts next to items, which visually looks like extra coverage on top of the total.
What to do instead
Redraw Coverage C as a large box with smaller boxes inside. Label the total limit and each sublimit, then answer 'how much for a stolen ring?' by taking the lesser of the sublimit and the remaining Coverage C limit.
Computing business income loss as lost revenue, without adding continuing expenses and without limiting the loss to the period of restoration.
Candidates equate 'lost profits' with 'lost sales' and forget that business income coverage pays net income plus continuing normal operating expenses.
What to do instead
Use the formula: business income loss = net income lost + continuing expenses − noncontinuing expenses, measured over the period of restoration. Then apply any waiting period and coinsurance. Drill with a 60-day shutdown example.
Answering negligence questions with contributory negligence, which completely bars recovery, instead of New York's pure comparative negligence rule.
Many national study resources default to common-law contributory negligence, and New York's rule is a state-specific exception.
What to do instead
Tie 'NY = pure comparative' to every negligence question. Practice reducing a plaintiff's award by their percentage of fault and confirm that even a plaintiff who is 90 percent at fault recovers 10 percent.
Saying New York no-fault/PIP pays for vehicle damage or for pain and suffering below the serious injury threshold.
PIP is described as 'no-fault,' so candidates conflate it with collision coverage and with third-party liability.
What to do instead
Separate the three buckets: PIP pays medical expenses and lost wages (basic limit $50,000); collision pays for damage to the insured vehicle; liability pays third-party bodily injury and property damage. Memorize that pain and suffering requires a 'serious injury' as defined by New York law.
Assuming an umbrella policy drops down to fill every gap in the underlying coverage, including gaps created by exclusions.
The word 'umbrella' suggests all-encompassing coverage, and drop-down is often taught without its conditions.
What to do instead
Memorize that drop-down applies only when the underlying policy is exhausted by a covered loss or its aggregate is reduced by payments, not when the underlying policy excludes the loss. Check the umbrella's self-insured retention and exclusion list on every practice question.
Treating workers' compensation as an ordinary tort claim and allowing an injured employee to sue the employer for negligence.
General liability concepts dominate study time, so exclusive remedy gets only a single line of attention in the workers' compensation chapter.
What to do instead
Write 'exclusive remedy = no suit against employer' at the top of the workers' compensation page. Practice distinguishing third-party suits, which are allowed, from employer suits, which are barred.
Confusing the roles and authority of an insurance agent versus a broker in New York, especially who represents whom and who can bind coverage.
The terms are used loosely in everyday speech and in some prep materials, so the legal distinction is never firmly fixed.
What to do instead
Create a two-column table: agent represents the insurer and can bind within granted authority; broker represents the insured and has no binding authority unless specifically granted. Apply it to a scenario where a broker orally 'binds' coverage.