Property insurance principles are covered in the national guide. Arizona adds contract rules in A.R.S. Title 20, Chapter 11, rate and form rules, and commercial cancellation standards that appear on the Property and P&C exams.

Insurable interest in property (20-1105)

An insurable interest in property is any actual, lawful, and substantial economic interest in its safety or preservation. It is measured by how much the insured would lose if the property were damaged.

Binders (20-1120)

• A binder may be oral or written and includes the usual policy terms.
• It is valid until the policy is issued, or 90 days from its effective date, whichever is shorter, unless the Director approves an extension.

Policies and forms

• Every policy must state the parties, the insurer, the subject of insurance, the risks insured, the effective time and period, the premium, and the conditions. It need not state the producer's commission (20-1113).
• Application statements are representations. A misstatement defeats recovery only if fraudulent, material, or decisive to the insurer's decision (20-1109).
• A P&C form may be used once the Director approves it, or after 30 days without disapproval (20-398).
• An insurer may post its forms online instead of mailing them if, among other conditions, each declarations page lists the exact forms purchased (20-240).
• An insured who does business with the insurer electronically is deemed to consent to electronic notices unless they opt out (20-239).
• The producer's name must appear on the declarations or an endorsement, but leaving it off doesn't void the policy (20-229).

Rates (20-383 to 20-385)

• Rates may not be excessive, inadequate, or unfairly discriminatory.
• Rates are presumed not excessive where reasonable price competition exists.
• Classifications may not be based on race, color, creed, or national origin.
• Arizona uses use and file: rates are filed within 30 days after they take effect.

Commercial property and liability cancellation (20-1671 to 20-1677)

Scope. These rules exclude workers' compensation, auto, surplus lines, and excess policies.

• Permitted grounds include loss of reinsurance initiated by the reinsurer and acts that materially increase the hazard.
• A late nonrenewal notice extends coverage to 45 days after the notice is sent.
• No nonrenewal notice is needed if the insurer's group offered renewal.

Common exam traps

• Binders last up to 90 days.
• Arizona P&C rating is use and file: filed within 30 days after use.
• Commercial cancellation and nonrenewal notice is 45 days, or 10 for nonpayment.