VA Property & Casualty cheat sheet

Virginia insurance regulation is administered by the Bureau of Insurance, a division of the State Corporation Commission headed by the Commissioner of Insurance.

Producer licenses are issued by line of authority: life and health, property and casualty, personal lines, and title.

Resident producers must complete 24 continuing education credit hours every two years, including at least 3 hours of ethics.

An insurer must file an appointment with the Bureau for each producer authorized to act on its behalf before the producer solicits business.

A producer may not pay or accept commission on Virginia business without holding a current license for that line of authority.

Premiums collected are held in a fiduciary capacity and must be segregated from the producer's personal or general business funds.

Virginia unfair trade practice statutes prohibit misrepresentation, rebating, twisting, false advertising, boycott, coercion, and unfair claim settlement practices.

A producer must report administrative actions taken by another state's insurance regulator and criminal prosecutions to the Bureau.

Risk is uncertainty of loss; pure risk (chance of loss or no loss) is insurable, while speculative risk (chance of loss or gain) is not.

Insurable risks require many similar exposure units, accidental and measurable losses, determinable probability, and losses that are not catastrophic to the insurer.

A peril is the cause of loss (fire, windstorm); a hazard is a condition that increases the chance or severity of loss.

Hazards are classified as physical (icy steps), moral (dishonesty), and morale (carelessness).

The principle of indemnity limits recovery to actual financial loss; valued policies and replacement cost valuation are exceptions.

Utmost good faith imposes duties of representation and disclosure; material misrepresentation or concealment can void coverage.

Insurance contracts are contracts of adhesion, aleatory, unilateral, and conditional; ambiguities are construed against the insurer that drafted the policy.

Subrogation transfers the insured's rights of recovery against a third party to the insurer after the insurer pays the loss.

Waiver is the voluntary surrender of a known right; estoppel prevents a party from denying a right after another has relied on its conduct.

The policy structure consists of declarations, insuring agreement, conditions, exclusions, and definitions.

Coinsurance formula: (insurance carried divided by insurance required) times the loss equals recovery, subject to the policy limit and minus the deductible.

Actual cash value equals replacement cost minus depreciation; replacement cost pays new-for-old without depreciation, subject to policy limits.

A standard mortgage clause gives the lender the right to receive loss payments and notice of cancellation or nonrenewal.

Other insurance provisions allocate a loss among concurrent policies by pro rata share, contribution by equal shares, or primary and excess.

Appraisal resolves disputes over the amount of loss; arbitration resolves disputes over policy interpretation.

A vacancy provision suspends coverage after 60 consecutive days of vacancy on most commercial property forms; unoccupancy generally does not suspend coverage.

For a pair or set, the insurer may repair or replace any part or pay the difference between the value of the set and the value of the remaining part.

HO-3 covers the dwelling and other structures on an open-peril basis and personal property on a broad named-peril basis.

HO-5 is open peril on both dwelling and personal property; HO-2 is broad named peril on both; HO-8 is modified form for older homes.

Coverage A is the dwelling, B other structures, C personal property, D loss of use; Section II provides Coverage E personal liability and Coverage F medical payments to others.

The HO-3 replacement cost condition requires carrying at least 80% of the dwelling's full replacement cost to collect full replacement cost on partial losses.

Special limits commonly include $200 for money and $1,500 for theft of jewelry, watches, and furs; $2,500 for theft of silverware and goldware.

Coverage D pays additional living expense or fair rental value and is typically limited to 20% to 30% of the Coverage A limit.

Common Section II limits are $100,000 for personal liability and $1,000 for medical payments to others per person.

The Section I deductible does not apply to Section II liability or medical payments coverage.

Dwelling policies DP-1, DP-2, and DP-3 cover the dwelling and personal property but include no liability coverage unless added by endorsement.

Commercial property coverage applies to the building, business personal property, and personal property of others; the building and personal property form is the base.

The coinsurance percentage, commonly 80% or 90%, is applied to the full value of the covered property at the time of loss.

A reporting form covers fluctuating inventory values; premium is adjusted at the end of the period based on the values reported.

Business income equals net income plus continuing normal operating expenses, including payroll, during the period of restoration.

The business income period of restoration begins 72 hours after the direct physical loss and ends when the property is repaired with reasonable speed.

Extra expense pays costs incurred to avoid or minimize suspension of operations and usually carries no coinsurance requirement.

Civil authority coverage extends business income when access is prohibited by government order after a covered loss to nearby property.

Inland marine covers property in transit, bailee property, and mobile or floating property, and is not limited to a fixed location.

Equipment breakdown covers loss from mechanical or electrical failure, which standard property forms exclude.

Elements of negligence: legal duty owed, breach of that duty, proximate cause, and actual damages.

Compensatory damages include special damages (medical bills, lost wages) and general damages (pain and suffering); punitive damages punish the wrongdoer.

Virginia applies pure contributory negligence: fault by the claimant, however slight, bars recovery entirely.

Virginia retains joint and several liability, allowing recovery of the full judgment from any one liable defendant.

Vicarious liability holds one party liable for another's acts, such as an employer for an employee acting within the scope of employment.

Res ipsa loquitur permits an inference of negligence when the injury would not normally occur without negligence and the defendant controlled the instrumentality.

Strict liability applies without fault in cases such as abnormally dangerous activities and defective products.

Liability policies may use split limits (per person and per occurrence) or a single combined limit; defense costs are usually paid in addition to the limit.

Claims-made policies respond to claims first made during the policy period, subject to a retroactive date and an extended reporting period.

The personal auto policy contains Part A liability, Part B medical payments, Part C uninsured motorists, and Part D damage to your auto, plus duties after loss and general provisions.

Virginia minimum liability limits are 25/50/20: $25,000 per person, $50,000 per accident bodily injury, and $20,000 property damage.

Virginia requires uninsured motorist coverage equal to the liability limits unless the insured reduces it in writing to the statutory minimum.

Part B medical payments covers reasonable medical expenses for the insured and passengers regardless of fault, subject to a per-person limit.

Part D collision covers impact with another object or overturn; other-than-collision covers theft, fire, glass, vandalism, and weather.

A newly acquired auto is typically covered for 14 days when the policy already includes physical damage coverage, and 4 days for other-than-collision when it does not.

A temporary substitute auto is a non-owned vehicle used while the insured auto is out of service; it is treated as a covered auto.

The policy excludes intentional damage, racing, and use of the vehicle for livery or public transportation unless a rideshare endorsement is added.

A named nonowner policy covers the insured's use of rented or borrowed autos when no vehicle is owned.

The business auto coverage form uses numbered symbols to designate covered autos; symbol 1 is any auto and symbol 7 is specifically described autos.

Symbol 8 covers hired autos and symbol 9 covers nonowned autos used in the business; symbol 2 covers only owned autos.

Liability coverage responds to the insured's legal liability for bodily injury and property damage caused by covered autos.

Garage coverage is written for auto dealers and service or repair operations and combines liability, physical damage, and garagekeepers coverage.

Garagekeepers coverage insures damage to customers' vehicles in the insured's care and may be written as legal liability or direct primary coverage.

The motor carrier coverage form replaces the truckers form and covers owned, hired, and nonowned autos used in trucking operations.

Virginia requires commercial autos to carry liability limits of at least 25/50/20 and uninsured motorist coverage unless rejected.

Employer's nonownership liability arises when employees drive their personal autos on company business.

Commercial general liability Coverage A pays bodily injury and property damage; Coverage B pays personal and advertising injury; Coverage C pays medical expenses without regard to fault.

CGL limits include a general aggregate, a products-completed operations aggregate, and a per-occurrence limit.

The CGL excludes property in the insured's care, custody, or control, damage to the insured's own product, and expected or intended injury.

An occurrence form covers injury or damage that takes place during the policy period regardless of when the claim is reported.

A claims-made form covers claims first made during the policy period and depends on a retroactive date and extended reporting period.

An umbrella policy provides limits above scheduled underlying policies and can drop down when underlying coverage is exhausted or absent.

A commercial excess policy follows the terms of the underlying policy and does not broaden coverage.

Professional liability (errors and omissions) covers negligent acts, errors, and omissions in rendering professional services.

Additional insured endorsements extend coverage to parties such as landlords or general contractors; certificates of insurance evidence coverage but do not create it.

Virginia's Workers' Compensation Act is administered by the Virginia Workers' Compensation Commission, which adjudicates claims.

Employers with three or more regular employees, including part-time and seasonal workers, must secure coverage or qualify as self-insured.

Workers compensation is no-fault and provides medical, disability income, rehabilitation, and death benefits.

Virginia temporary total disability pays 66 2/3% of the average weekly wage, subject to a statutory maximum, for up to 500 weeks.

Virginia imposes a 7-day waiting period; if disability exceeds 21 days, compensation is paid retroactively to the date of injury.

Death benefits include burial expenses and weekly payments to dependents, subject to statutory maximums.

Sole proprietors and partners are excluded unless they elect coverage; corporate officers are included unless they elect to be excluded.

Premium is based on payroll per $100 of remuneration, classification codes, and an experience modification factor.

The exclusive remedy doctrine makes workers compensation the employee's sole remedy against the employer for work-related injury.

The Bureau of Insurance, within the State Corporation Commission, licenses insurers and producers, reviews rates and forms, and handles consumer complaints.

Virginia is a tort state: at-fault drivers are liable for damages, and there is no mandatory personal injury protection coverage.

Virginia's financial responsibility law requires 25/50/20 liability limits and uninsured motorist coverage at liability limits unless reduced in writing.

The Virginia Property and Casualty Insurance Guaranty Association pays covered claims of insolvent insurers, subject to a per-claim statutory cap.

Virginia's valued policy statute requires payment of the full amount of insurance when a building is totally destroyed by fire, absent fraud.

Virginia prohibits rebating premiums as an inducement to purchase insurance and prohibits twisting and misrepresentation.

Insurers must file rates and forms with the Bureau; most property and casualty rates are filed on a file-and-use basis.

Virginia requires insurers to give written notice of cancellation or nonrenewal of personal auto and homeowners policies within statutory timeframes.

Virginia uninsured motorist coverage includes underinsured motorist protection and applies to both bodily injury and property damage.