WV Property & Casualty cheat sheet

Insurable interest in property must exist at the time of loss; in life insurance it must exist at the time of application.

Indemnity limits recovery to the actual financial loss; ACV valuation and coinsurance both enforce the indemnity principle.

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

Utmost good faith: a material misrepresentation or concealment on the application allows the insurer to rescind the policy.

Aleatory contract: the values exchanged are unequal and contingent on chance - a small premium may produce a large claim payment or none at all.

Contract of adhesion: the insurer drafts the policy, so ambiguities are construed in favor of the insured.

Insurance transfers pure risk (loss or no loss) only; speculative risk (loss, no loss, or gain) is not insurable.

Law of large numbers: a larger and more homogeneous pool of exposure units makes losses more predictable and rates more stable.

Hazard types: physical (icy sidewalk), moral (dishonest intent to collect), morale (carelessness from having insurance).

ACV = replacement cost minus depreciation. Replacement cost = cost to repair or replace with new property of like kind and quality, with no depreciation deduction.

Coinsurance payment = (insurance carried / insurance required) x loss, then subtract the deductible, never exceeding the policy limit. Insurance required = coinsurance percentage x value at time of loss.

Coinsurance example: 80% coinsurance, value $200,000, carried $120,000, loss $40,000. Required = $160,000; (120,000/160,000) x 40,000 = $30,000 payable before the deductible.

The declarations page states the named insured, locations, limits, deductibles, forms attached, and policy period.

Structure of a policy: insuring agreement grants coverage, exclusions narrow it, conditions set the insured's duties, definitions control the meaning of terms.

Duties after loss: give prompt notice, protect property from further damage, prepare an inventory of damaged property, submit a signed proof of loss, cooperate in the investigation, and submit to examination under oath if required.

Appraisal resolves a dispute over the amount of loss; arbitration resolves other disputed issues. The insured may not abandon damaged property to the insurer.

Other insurance provisions: pro rata means each policy pays its proportionate share; excess means one policy pays only after the other is exhausted.

Vacancy (no people and no contents) typically restricts or suspends vandalism, glass, and sprinkler leakage coverage; unoccupancy (no people but contents remain) is treated less severely.

Standard limits: Coverage B Other Structures typically 10% of Coverage A; Coverage C Personal Property typically 50% of A; Coverage D Loss of Use typically 30% of A; Coverage E Personal Liability; Coverage F Medical Payments to Others.

HO-3 covers the dwelling on an open-peril basis and personal property for named perils only; HO-5 covers both on an open-peril basis; HO-2 covers both for named perils.

HO-4 renters covers personal property and liability but not the building; HO-6 condo covers interior building items, betterments, and personal property; HO-8 modified form serves older homes with functional replacement cost.

Section I perils commonly excluded: earth movement, flood, ordinance or law, neglect, intentional loss, governmental action, war, and nuclear hazard.

Coverage C special limits (money, securities, theft of jewelry and furs, theft of silverware, business property) cap payment below the total Coverage C limit.

Replacement cost on the dwelling is standard in the HO-3; contents replacement cost is an option and, when not elected, contents settle at actual cash value.

Section II excludes intentional injury, business pursuits of an insured, motor vehicle liability, and injury to insureds (except residence employees).

Coverage D pays additional living expenses and fair rental value while the residence is uninhabitable; payments end when repairs are complete or the insured permanently relocates.

Dwelling policies (DP-1, DP-2, DP-3) provide property and loss of use coverage but no personal liability; they are used for rental dwellings and non-owner-occupied homes.

The Building and Personal Property Coverage Form insures the building, business personal property, and personal property of others; coinsurance is a standard condition and replacement cost is optional.

Business income = net income that would have been earned plus continuing normal operating expenses, including payroll, during the period of restoration; extra expense pays costs to continue operations.

Causes of Loss forms: Basic (named perils), Broad (Basic plus breakage, water damage, and similar perils), Special (open perils subject to exclusions).

The agreed value option suspends the coinsurance requirement; reporting forms charge a deposit premium and adjust it to actual values, with a premium adjustment at the time of loss.

BOP eligibility is limited to small and medium businesses such as retail, offices, and apartment buildings; auto dealers, bars, and large manufacturers are ineligible.

After 60 days of vacancy, commercial property losses from vandalism, glass breakage, and sprinkler leakage are excluded and other covered loss payments are reduced by 15%.

Common commercial property extensions include debris removal, preservation of property, and newly acquired or newly constructed property.

Products-completed operations coverage responds to bodily injury or property damage occurring away from the premises after the product or work has been completed.

Personal auto policy parts: A Liability, B Medical Payments, C Uninsured/Underinsured Motorists, D Damage to Your Auto, plus duties after an accident.

West Virginia minimum liability limits are $25,000 per person / $50,000 per accident for bodily injury and $25,000 for property damage; uninsured motorist coverage must be offered at those limits and may be rejected only in writing.

Your covered auto includes owned autos, newly acquired autos, trailers, and temporary substitute autos.

Newly acquired auto: a replacement vehicle is covered immediately; an added vehicle gets automatic coverage for 14 days when the policy includes collision or other than collision coverage.

Non-owned auto coverage applies to a borrowed or rented private passenger auto; physical damage coverage for non-owned autos is narrower than liability coverage.

PAP exclusions: intentional damage, racing, use as a public or livery conveyance, vehicles with fewer than four wheels, and autos furnished for the insured's regular use by an employer.

Split limits show three numbers (per-person BI / per-accident BI / per-accident PD); a combined single limit applies one total per accident to bodily injury and property damage together.

Commercial auto covered-auto symbols: 1 = any auto, 2 = owned autos only, 7 = specifically described autos, 8 = hired autos, 9 = nonowned autos.

The MCS-90 endorsement provides proof of financial responsibility for for-hire interstate carriers and applies regardless of other insurance available to the insured.

CGL structure: Coverage A bodily injury and property damage, Coverage B personal and advertising injury, Coverage C medical payments.

CGL limits: general aggregate, products-completed operations aggregate, each occurrence, personal and advertising injury limit, and damage to premises rented to you.

Occurrence forms cover injury or damage that takes place during the policy period whenever the claim is reported; claims-made forms cover claims first made during the period, limited to acts after the retroactive date.

An umbrella policy provides excess limits and can drop down to fill gaps in underlying coverage, usually subject to a self-insured retention; an excess policy only follows form above the underlying limits.

Negligence elements: duty owed, breach of duty, proximate cause, and damages - all four must be proven by the claimant.

West Virginia applies modified comparative fault: damages are reduced by the claimant's percentage of fault, and the claimant is barred when his or her fault exceeds the combined fault of the defendants.

Workers compensation pays statutory benefits regardless of fault and is generally the employee's exclusive remedy against the employer.

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

Absolute liability arises from statute or inherently dangerous activity (for example, workers compensation or blasting) and requires no proof of negligence.