The national guide covers the core property concepts:

• Perils and hazards: physical, moral and morale hazards.
• Valuation and loss settlement: actual cash value versus replacement cost, coinsurance, deductibles and pro rata other insurance.
• Policy terms: insurable interest, subrogation, binders, endorsements and proof of loss.

Hawaii adds statutory definitions and a few rules about the standard fire policy and over-insurance that the state questions draw on. Comparative negligence is included here because Hawaii's personal lines exam tests it with the basics.

National concepts in brief

• Actual cash value (ACV) = replacement cost minus depreciation. Replacement cost pays with no deduction for depreciation.
• Insurable interest in property must exist at the time of the loss.
• Indemnity restores the insured to the pre-loss position without profit. Subrogation lets the insurer recover from the party at fault.
• A binder is temporary evidence of coverage. An endorsement changes the policy.
• Pro rata other insurance: each policy pays its share of the total limits. For example, a $60,000 policy and a $40,000 policy split a $10,000 loss $6,000 and $4,000.

Hawaii definitions

• Property insurance: insurance against loss of or damage to real or personal property of every kind, and against loss that results from that damage (HRS 431:1-206).
• Marine and transportation insurance (HRS 431:1-207) includes:
  • jewelry, precious stones and precious metals, whether or not in transit;
  • bridges, tunnels, piers, wharves and other aids to transportation, within the statute's peril limits.
• Ocean marine insurance includes personal property moving among the Hawaiian islands by water (HRS 431:1-211).
• Vehicle insurance covers land vehicles, aircraft, and draft or riding animals (HRS 431:1-208).
• Licensing: the property line of authority covers direct or consequential loss to property. Selling vehicle or marine and transportation insurance requires both property and casualty lines (HRS 431:9A-103(b), 9A-107(a)(3)).

Insurable interest

• A Hawaii property contract is enforceable only for people with an insurable interest.
• Hawaii defines insurable interest as any lawful and substantial economic interest in keeping the property safe from loss (HRS 431:10E-101).

The standard fire policy

• Hawaii's standard fire policy is the New York standard fire policy in effect on December 31, 1943, or an approved equivalent (HRS 431:10-210(a)).
• An approved equivalent gives fire coverage that, taken as a whole, is substantially the same as or more favorable to the insured than the standard policy.
• Not covered by the standard fire policy rule: inland marine policies and policies on motor vehicles or aircraft.
• Multi-peril policies need not follow every standard fire provision, as long as their fire and lightning provisions are exactly the standard ones (HRS 431:10-210(e)).
• Provisions required by law must be printed separately under the title "Provisions required by law to be inserted in this policy."
• Hawaii-specific exclusions the insurer may attach (each can be added back by endorsement):
  • loss from nuclear reaction, radiation or contamination;
  • fire damage to sugarcane caused by volcanic activity (HRS 431:10-210(f)).

Over-insurance

• Over-insurance means insuring property against the same hazard for more than its actual cash value (HRS 431:10E-102).
• It is illegal to knowingly sell coverage that would over-insure. Exceptions (HRS 431:10E-103):
  • replacement cost coverage on buildings and household furnishings;
  • coverage for demolition and the extra cost of rebuilding to meet laws or ordinances.

Comparative negligence

• Hawaii uses modified comparative negligence (HRS 663-31).
• A plaintiff whose negligence is not greater than the defendant's recovers damages reduced by their own share.
• A plaintiff who is more at fault than the defendant recovers nothing.

Rate regulation (property and casualty)

• Rates must not be excessive, inadequate or unfairly discriminatory (HRS 431:14-103).
• Fire rates must consider at least the most recent five years of fire experience.
• Filings go to the commissioner through SERFF and carry a 30-day waiting period, which can be extended up to 15 days (HRS 431:14-104). A filing not disapproved in time is deemed to meet the law.
• Coverage changes: a policy revision that changes coverage must be filed with an analysis of its effect on rates (HRS 431:14-105).
• Penalties: wilful violations can bring up to $5,000 each (HRS 431:14-117).

Common exam traps

• Hawaii's standard fire policy is the 1943 New York form.
• The over-insurance ban is measured against actual cash value. Replacement cost coverage is an allowed exception.
• Property moving between islands by water is ocean marine.
• Insurable interest in property must exist when the loss happens.
• A plaintiff 50% or less at fault still recovers, reduced by their share.