Property Insurance
Homeowners and dwelling forms
Map the six coverages: A – Dwelling, B – Other Structures, C – Personal Property, D – Loss of Use, E – Personal Liability, F – Medical Payments to Others. HO-3 insures the dwelling on an open (special) peril basis and personal property on a named peril basis - a favorite exam distinction. HO-5 is special on both; HO-4 (renters) and HO-6 (condo) cover personal property and interior improvements; HO-8 covers functional replacement cost for older homes. Dwelling policies (DP-1 basic, DP-2 broad, DP-3 special) are for non-owner-occupied risks.
Know typical special limits (jewelry, money, securities, business property in the home) and the big exclusions: flood/surface water, earth movement, neglect, intentional loss, ordinance or law, and nuclear hazard. Sewer backup is excluded unless endorsed, usually with a sublimit.
Commercial property
Learn the Building and Personal Property Coverage Form, the three causes of loss forms (basic, broad, special), coinsurance and agreed value, blanket vs. specific insurance, Business Income (period of restoration) and Extra Expense, the vacancy provision, and reporting forms. Note inland marine (property in transit, bailee coverage) and crime forms (employee dishonesty, forgery). Flood is written through the NFIP, separately from any property policy.
Traps
Assuming flood or earthquake is covered; forgetting sublimits; treating "vacancy" as "unoccupancy"; and mixing up ACV (the default on many commercial forms) with replacement cost.
Worked example
A 12-year-old roof with a 20-year life has a replacement cost of $20,000. Straight-line depreciation is $1,000 per year, so depreciation = $12,000 and ACV = $8,000. Under a replacement cost endorsement the insurer pays the full $20,000 once repair or replacement is complete.