WI Property & Casualty cheat sheet

The Wisconsin Office of the Commissioner of Insurance (OCI), headed by a commissioner appointed by the governor, regulates insurers, producers, rates, and policy forms in the state.

Producer continuing education: 24 credit hours per two-year licensing period, including at least 3 credit hours in ethics.

A person must hold a valid Wisconsin producer license before soliciting, negotiating, or selling insurance for a commission.

Rebating any part of the premium or commission to induce a purchase is prohibited; so are misrepresentation, twisting, and unfair claim settlement practices.

Wisconsin requires at least 10 days' written notice to cancel a policy for nonpayment of premium and 60 days' written notice of nonrenewal.

Mandatory auto financial responsibility minimums are $25,000 per person / $50,000 per accident bodily injury liability and $10,000 property damage liability; proof of insurance is required to register a vehicle.

Rates must not be excessive, inadequate, or unfairly discriminatory, and insurers must file forms and rates with OCI for review.

Violations of the insurance code can result in fines, license suspension or revocation, and restitution orders issued by the commissioner.

The Wisconsin Insurance Security Fund pays covered claims of policyholders of insolvent member insurers, funded by assessments on insurers.

Pure risk (loss or no loss) is insurable; speculative risk (chance of loss or gain) is not insurable.

Insurable risks require many similar exposure units, accidental loss, definite and measurable loss, calculable probability, non-catastrophic loss to the insurer, and an affordable premium.

Principle of indemnity: the insured is restored to approximately the pre-loss financial position, no better and no worse.

Insurable interest must exist at policy inception for property insurance; for life insurance it is required only at inception, not at death.

Elements of a valid insurance contract: offer, acceptance, consideration, competent parties, and legal purpose.

Insurance contract characteristics: contract of adhesion, aleatory, unilateral, conditional, and personal.

Utmost good faith requires the applicant to disclose all material facts; a material misrepresentation or concealment makes the contract voidable by the insurer.

Hazard types: physical (icy steps), moral (dishonest intent), morale (carelessness), and legal (court awards influenced by large limits).

The law of large numbers lets insurers predict losses across a pool; reinsurance cedes portions of risk to another insurer.

Policy structure: declarations, insuring agreement, conditions, exclusions, and definitions; the insuring agreement states the insurer's promise.

Actual cash value = replacement cost minus depreciation. Replacement cost coverage pays the cost to repair or replace with new property of like kind and quality.

Coinsurance required limit = coinsurance percentage × insurable value at time of loss; settlement = (limit carried ÷ limit required) × loss, never more than the policy limit.

Coinsurance example: 80% clause, $800,000 required, $400,000 carried, $100,000 loss pays $50,000.

Loss payment options include paying ACV, paying replacement cost, repairing or replacing, or taking the damaged property; the insured may not abandon property to the insurer.

Duties after loss: prompt notice, protect property from further damage, submit a sworn proof of loss, provide an inventory of damaged property, and cooperate in the investigation.

Other insurance on property is settled pro rata by limits; umbrella and excess forms pay after underlying coverage is exhausted.

Appraisal resolves disputes over the amount of loss; arbitration or litigation resolves coverage disputes. Salvage and subrogation rights transfer to the insurer after payment.

Increased-hazard conditions such as long-term vacancy or concealment and fraud can suspend or void coverage.

HO-3 covers the dwelling and other structures on an open-peril basis and personal property on a named-peril basis; HO-2 is broad named peril; HO-5 is open peril on both.

HO-4 is the tenants form (contents and liability only), HO-6 is the condominium unit-owners form, and HO-8 is the modified form for older or higher-risk homes.

Standard relationships to Coverage A: Coverage B = 10%, Coverage C = 50% (70% on some forms), Coverage D = 30%; Coverage E typically $100,000 and Coverage F $1,000 per person.

Standard special limits include $200 for money, $1,500 for securities, $1,500 for theft of jewelry, watches, and furs, and $2,500 for theft of silverware and of firearms.

Common HO exclusions: earth movement, flood, ordinance or law, neglect, intentional loss, war, nuclear hazard, business pursuits, and liability arising from owned motor vehicles or aircraft.

The ISO dwelling program uses DP-1 (basic), DP-2 (broad), and DP-3 (special) property forms; personal liability and medical payments are added by endorsement.

Section II Coverage E pays sums the insured is legally obligated to pay for bodily injury or property damage; Coverage F pays medical expenses to others regardless of fault and excludes the insured's own household.

Coverage D pays additional living expenses, fair rental value, and prohibited-use costs when a covered loss makes the residence premises uninhabitable.

Replacement cost settlement on the dwelling normally requires insurance equal to at least 80% of full replacement cost; otherwise the loss is settled at actual cash value.

The Building and Personal Property (BPP) form covers the building, business personal property, and personal property of others in the insured's care, custody, or control.

Causes of loss forms: basic (named perils), broad (named perils plus water damage and breakage), and special (open peril, subject to exclusions).

Coinsurance is commonly 80%; an agreed value option suspends coinsurance, and reporting forms adjust premium based on values reported to the insurer.

Business income = net income that would have been earned plus continuing normal operating expenses; a 72-hour waiting period and an extended period of indemnity may apply.

Extra expense pays costs to continue operations during restoration, not lost income.

Ordinance or law coverage has three parts: A for the undamaged portion of the building, B for demolition cost, and C for increased cost of construction.

The vacancy provision reduces loss payment by 15% for most causes of loss when the building has been vacant beyond the stated period.

Inland marine examples: motor truck cargo, contractors' equipment, valuable papers and records, accounts receivable, jewelers block, fine arts, and trip or annual transit floaters.

The Nationwide Marine Definition determines which property and transportation exposures may be written as inland marine.

Four elements of negligence: duty owed, breach of duty, proximate cause, and actual damages; all four must be proven.

The reasonable person standard sets the duty of care; children are held to the standard of similar-age children, and professionals to the skill customary in their field.

Res ipsa loquitur permits an inference of negligence when the injuring instrumentality was in the defendant's exclusive control and the accident would not ordinarily occur without negligence.

Negligence per se: violation of a statute intended to protect a class of persons establishes a presumption of breach.

Wisconsin uses modified comparative negligence: the plaintiff's recovery is reduced by the plaintiff's percentage of fault, and a plaintiff 51% or more at fault recovers nothing.

Under Wisconsin law a defendant 51% or more causally negligent may be jointly and severally liable for the plaintiff's entire damages.

Damage categories: special (medical bills, lost wages), general (pain and suffering), and punitive (to punish intentional or reckless conduct).

Defenses and immunities include comparative negligence, assumption of risk, governmental and charitable immunity, and the statute of limitations (three years for personal injury in Wisconsin).

Strict liability applies to ultrahazardous activities and defective products, where fault need not be shown but causation and damages must be.

Coverage A pays sums the insured becomes legally obligated to pay as damages because of bodily injury or property damage caused by an occurrence.

Coverage B covers personal and advertising injury offenses such as libel, slander, false arrest, wrongful eviction, and infringement of advertising ideas.

Coverage C medical payments pays reasonable medical expenses without regard to fault, usually with a $5,000 per person limit.

Limits include each occurrence, general aggregate, products-completed operations aggregate, personal and advertising injury, damage to premises rented to you, and medical expense.

Occurrence forms respond to injury or damage happening during the policy period; claims-made forms respond to claims first made during the period, limited by the retroactive date.

Extended reporting periods: a basic 60-day period is automatic, and a supplemental extended reporting period of up to five years is available by endorsement.

Key exclusions: expected or intended injury, liability assumed under contract (except insured contracts), liquor liability, pollution, autos, aircraft, watercraft, workers compensation, damage to your product or your work, impaired property, recall, and professional services.

Insured contracts include leases of premises, easements, sidetrack agreements, and tort liability assumed in a business contract.

Conditions require prompt notice of occurrences, cooperation with the insurer, and no voluntary payments by the insured without insurer consent.

Personal auto policy parts: A liability, B medical payments, C uninsured/underinsured motorists, D damage to your auto, and E duties after an accident or loss.

Wisconsin minimum limits are $25,000/$50,000/$10,000; Wisconsin is an at-fault (tort) state and does not require personal injury protection.

Newly acquired autos receive automatic coverage for 14 days when the policy already carries collision coverage, and for 4 days when it does not.

Non-owned auto coverage applies to a temporary substitute vehicle or a borrowed vehicle used with permission; it does not cover vehicles available for the regular use of the insured.

Business auto symbols 1 through 9 designate covered autos; symbol 1 means any auto, symbol 7 means specifically described autos, symbol 8 means hired autos, and symbol 9 means non-owned autos.

Physical damage settlements may be actual cash value, stated amount, or agreed value, with the deductible applied to each loss.

The MCS-90 endorsement provides public liability coverage for for-hire motor carriers even when policy exclusions would otherwise bar the claim.

Common personal auto exclusions: intentional damage, racing or speed contests, carrying persons or property for a fee, and vehicles used as public or livery conveyance.

Financial responsibility laws require SR-22 certifications after serious violations or uninsured accidents to keep registration and driving privileges.

The Wisconsin Workers Compensation Act is administered by the Department of Workforce Development; benefits are paid regardless of the employer's fault.

Exclusive remedy: statutory benefits replace the employee's right to sue the employer for most work-related injuries.

Part One (workers compensation) pays all benefits required by state law with no dollar limit; Part Two (employers liability) responds to suits outside the statute, commonly with a $100,000 limit.

Benefit categories: medical expenses, temporary total disability, temporary partial disability, permanent partial and permanent total disability, death benefits, and vocational rehabilitation.

Disability benefits generally replace about two-thirds of the employee's average weekly wage, subject to a state maximum.

Occupational disease and gradual-onset injuries are covered; benefits are payable where the employee's work exposure occurred in Wisconsin.

Coverage may be secured through a commercial policy, individual self-insurance, or group self-insurance; corporate officers may elect to be included or excluded.

The Uninsured Employer Fund pays benefits when an uninsured employer fails to pay a valid claim.

Employers liability coverage responds to claims such as loss of consortium that are not payable under the statutory benefit schedule.

An umbrella policy provides limits above underlying general liability, auto, and employers liability coverage and can drop down to cover gaps, subject to a self-insured retention.

A personal umbrella typically requires underlying homeowners and auto limits (often $300,000 combined single limit) before it responds; higher underlying limits reduce the umbrella premium.

Excess (following form) liability sits above one underlying policy and follows its terms; umbrella coverage is broader and may cover exposures the underlying policies exclude.

Crime coverages include employee dishonesty, forgery or alteration, theft, robbery, burglary, computer fraud, and funds transfer fraud, written on discovery or loss-sustained forms.

Fidelity coverage reimburses the insured for employee dishonesty; a surety bond is a three-party guarantee involving the obligee, the principal, and the surety.

Professional liability/errors and omissions, directors and officers liability, employment practices liability, fiduciary liability, and cyber liability are commonly written on a claims-made basis.

Cyber coverage has first-party elements (breach response, data restoration, business interruption) and third-party elements (privacy and network security liability).

Liquor liability covers bodily injury and property damage arising from serving alcohol; the CGL policy excludes most liquor exposures.

Specialty liability lines also include employment practices, fiduciary, kidnap and ransom, and environmental/pollution liability.