SC Property & Casualty common mistakes
SC Property & Casualty · Understand the traps and how to avoid them.
When asked what an HO-3 covers, the candidate states that personal property is written on an open-perils (special) basis, or picks HO-5 as the form that broadens only contents rather than both dwelling and contents.
The forms are memorized as a numbered ladder (HO-2, HO-3, HO-5) without tracking the two separate perils columns (Coverage A dwelling vs Coverage C personal property). The nickname 'special form' for the HO-3 reinforces the wrong idea that everything on the policy is open perils.
What to do instead
Rebuild the forms as a two-column table: HO-2 named perils on both; HO-3 open perils on dwelling, named perils on contents; HO-5 open perils on both; and note that an HO-3 can be upgraded to open-perils contents by endorsement (which makes the coverage look like an HO-5). Recite the table from memory before each practice set.
In a coinsurance problem the candidate multiplies the coinsurance percentage by the amount of the loss instead of by the insurance that should have been carried, or divides by the coinsurance percentage instead of comparing carried to required.
The coinsurance formula is remembered as a blur of terms, and the exam distractors are built from each individual wrong step, so a single slip lands on an answer choice that still looks plausible.
What to do instead
Write the calculation the same way every time: (insurance carried ÷ insurance required, where required = coinsurance % × value at time of loss) × loss amount, then cap the result at the policy limit and subtract the deductible last. Work ten problems where only one input changes so the effect of each variable is visible.
The candidate treats a commercial property causes-of-loss special form as though it covers everything and selects coverage for wear and tear, rust/corrosion, or an employee stealing from the insured.
The old label 'all risks' sticks, and the exclusions page is studied separately from the coverage grant, so the exclusions do not come to mind when the scenario involves an obviously damaged or missing item.
What to do instead
Memorize a short core exclusion list (wear and tear, deterioration, rust, faulty workmanship, employee dishonesty, voluntary abandonment) and pair each with the form that actually handles it - crime forms for employee dishonesty, boiler and machinery/equipment breakdown for mechanical failure. State the rule out loud: 'no property form insures the employee theft exposure.'
On a CGL scenario, the candidate selects coverage for the cost of tearing out and replacing the insured contractor's own defective work, or for damage to the insured's own product, because bodily injury or property damage and an occurrence are present.
Both triggers of the insuring agreement appear to be satisfied and the fact pattern is sympathetic, so the reader stops at the insuring agreement and never runs the business-risk exclusions (your work, your product, impaired property, recall).
What to do instead
Sort every CGL fact pattern with one question first: is the damaged thing someone else's person or property, or is it the insured's own work/product/impaired property? Only the first category survives. Then check the narrow exceptions, including the subcontractor exception to the 'your work' exclusion.
The candidate concludes that a person driving a borrowed or rented car has no liability coverage from their own personal auto policy, or assumes a newly acquired vehicle is automatically covered for every coverage part for a full policy term.
The PAP is studied coverage part by coverage part (A, B, C, D), so the 'non-owned auto' and 'newly acquired auto' definitions that cut across the parts never get applied to the parts individually. The borrowed-car scenario sounds like it belongs only to the owner's policy.
What to do instead
Draw a grid with Parts A, B, C and D down the side and three columns across: owned auto, non-owned/temporary substitute, newly acquired. Fill in the grid from memory, then check the definitions page for the short time window that applies to newly acquired autos and note that it runs from the date of acquisition, not the policy anniversary.
The candidate answers a business auto coverage question by picking 'any auto' or symbol 1 when the scenario asks whether a hired or non-owned auto, or an auto bought after the policy started, is covered, or assumes a specifically described auto symbol extends automatically to a newly purchased vehicle for the whole policy period.
The numbered symbols 1 through 9 are memorized as a list without being tied to the 'who is an insured' and newly acquired auto provisions, and the phrase 'any auto' feels obviously broad enough to end the analysis.
What to do instead
Make a symbol card: 1 = any auto; 2 = owned autos only; 3 = owned private passenger; 4 = owned autos other than private passenger; 5 = owned autos subject to no-fault; 6 = owned autos subject to compulsory uninsured motorist; 7 = specifically described autos; 8 = hired autos only; 9 = non-owned autos only. Next to it write the short automatic extension for newly acquired autos and which symbols it applies to.
The candidate answers that an injured worker may sue the employer in tort for the injury in addition to collecting workers' compensation benefits, or treats Employer's Liability (Part Two) as the part that pays the statutory benefits.
Part One and Part Two appear side by side on the same policy and are studied in one sitting, and the exclusivity of the remedy is counterintuitive to candidates who reason from general negligence law.
What to do instead
Write one line for each: Part One = statutory, no-fault benefits (medical, disability/indemnity, death and survivor) with the exclusive remedy barring employee tort suits against the employer; Part Two = employers liability, which responds when the employer is sued in tort over something outside the statutory system (for example a third-party action over). Then list the three benefit buckets and who each pays.
On a South Carolina negligence scenario the candidate applies contributory negligence (any fault bars recovery) or pure comparative negligence (recovery always reduced but never barred), or forgets to reduce the award by the claimant's own share.
Most study material covers all three doctrines together, and the doctrine tested most often in the source examples is not necessarily the one SC uses, so the candidate defaults to the first rule learned.
What to do instead
Anchor SC's rule in one sentence: modified comparative negligence, where the claimant's damages are reduced by the claimant's percentage of fault and a claimant whose fault exceeds the defendant's is barred from recovering. Practice three fact patterns with 20%, 50% and 70% claimant fault and compute the net recovery in each.
The candidate states that insurable interest in property must exist when the policy is issued, or that an insured may recover more than the actual loss because a higher limit was purchased.
Life insurance rules (insurable interest at inception, no cap tied to loss) are taught first and are simpler, and they carry over into property questions where the timing rule is the opposite.
What to do instead
Keep a two-line contrast card: property insurance requires insurable interest at the time of loss; life insurance requires it at policy inception. Add the indemnity principle underneath - recovery is limited to the actual loss, so a limit above the value of the property does not create extra recovery, and other insurance/valuation provisions exist to enforce that.
For South Carolina statutory items - cancellation and nonrenewal notice periods, the grace period, the deadline for acknowledging or paying a claim, or the requirements for a nonresident producer license - the candidate picks whichever number 'sounds standard' rather than the number SC actually requires.
State rules from several jurisdictions are studied in the same session, the SC-specific figures are buried in statute citations, and the exam distractors are other states' numbers, so pattern-matching on familiar digits produces a confident wrong answer.
What to do instead
Build a single-page SC numbers sheet keyed to the South Carolina Code Title 38 and the SC Department of Insurance rules, one line per figure with a short trigger phrase (for example 'cancellation for nonpayment → __ days'). Drill it as flashcards until each figure is recalled from the trigger phrase, and review the sheet the morning of the exam rather than re-reading the textbook chapter.