Property and Casualty Insurance Basics
Anatomy of a policy
Declarations state who, what, how much, and when. The insuring agreement is the promise. Conditions impose duties (notice, proof of loss, cooperation, protecting property, appraisal). Exclusions narrow the promise, definitions control meaning, and endorsements amend everything else. Named-peril forms list covered perils, so the insured must prove the loss fits one. Open-peril ("special") forms cover all risk of direct physical loss unless excluded, shifting the burden to the insurer to prove an exclusion applies.
Commercial property coinsurance
A coinsurance clause requires the insured to carry a limit at least equal to a stated percentage (usually 80–90%) of value. Short of that, payment = (limit carried ÷ limit required) × loss, then the deductible is applied, capped at the limit purchased. Homeowners forms use a replacement-cost condition instead - no penalty formula, but a reduced settlement when the dwelling is underinsured.
Liability side
Commercial general liability is written on an occurrence or claims-made basis, with per-occurrence and aggregate limits. Know the difference between an additional insured and a mere certificate holder. Personal auto minimums in South Carolina are 25/50/25, and uninsured/underinsured motorist coverage must be offered. South Carolina applies modified comparative negligence: a claimant 50% at fault recovers half; more than 50% recovers nothing.
Traps
Applying coinsurance to a homeowners policy. Treating a certificate as coverage. Forgetting that named-storm or hurricane deductibles are percentage deductibles, not flat dollar amounts.
Rule of thumb
Compute coinsurance only after confirming the form actually contains the clause, and always apply the deductible after the penalty. Example: $100,000 required, $60,000 carried, $20,000 loss = $12,000; less $1,000 deductible = $11,000.