The national guide covers the basic concepts of property and casualty insurance. This guide covers the Minnesota rules tested in this area. Every Minnesota fire policy must provide the coverage of the Minnesota standard fire insurance policy (Minn. Stat. 65A.01), with added rules in 65A.03 and 65A.08. Minnesota also has its own comparative fault statute.

The Minnesota standard fire policy (65A.01)

• No fire policy may be issued on Minnesota property unless it gives at least the standard policy's coverage, except where another statute provides otherwise.
• Removed property is covered pro rata for 5 days at each place it's moved to.
• Not covered: accounts, bills, currency, deeds, evidences of debt, money and securities. Bullion and manuscripts are covered only if named.
• Vacancy: no liability while the premises are vacant or unoccupied more than 60 consecutive days, unless otherwise agreed in writing.
• Terrorism: under a commercial policy, the insurer isn't liable for terrorism loss unless a terrorism endorsement is attached.

Conditions

• After a loss: give immediate written notice, protect the property, and within 60 days provide a signed, sworn statement of loss.
• Examination under oath: the insured must submit, after being told of the right to counsel and that answers may be used in later proceedings.
• Appraisal:
  • Each side names an appraiser within 20 days of written demand.
  • If the appraisers can't agree on an umpire within 15 days, a district court judge may appoint one, on 5 days' notice.
• Insurer's options: take the property, or repair, rebuild or replace it, with notice within 30 days of the proof of loss. No abandonment to the insurer.
• Payment: 60 days after proof of loss and agreement or appraisal.
• Suit: within 2 years after the loss.

Cancellation

• The insured cancels at short rate. The insurer cancels pro rata.
• A mortgagee's or contract-for-deed vendor's interest may be cancelled on 10 days' notice.
• Rescission (65A.01, subd. 3b): the policy can't be voided except for willful concealment or misrepresentation of a material fact with intent to defraud. Rescission can't defeat the claims of third parties or minor children.

Other Minnesota property rules

• Total loss: the insurer pays the full policy amount for a total loss, absent fraud or an unconsented increase in risk (65A.08, subd. 2).
• Coinsurance: allowed only if the insured requests it in writing and gets a lower rate in return (65A.08, subd. 5).
• Term: no property policy may knowingly be written for more than 5 years (65A.08, subd. 6).
• Other insurance: policies contribute in proportion to their amounts (65A.08, subd. 4).
• Binders: may be oral or written, and include all standard fire policy terms. A lender must accept a valid binder as evidence of coverage. Refusing can bring a $500 penalty per violation (65A.03).
• Business income: loss of rents or use-and-occupancy coverage lasts for the time needed to rebuild with due diligence. It isn't cut off by policy expiration (65A.01, subd. 4).

Comparative fault (Minn. Stat. 604.01)

On the liability side, a plaintiff whose fault is not greater than the defendant's may recover. Damages are reduced in proportion to the plaintiff's fault. The last clear chance doctrine is abolished. See the Minnesota Casualty Insurance Basics guide.

Common exam traps

• Vacancy suspension after 60 consecutive days. Removal coverage: 5 days.
• Sworn statement of loss: 60 days. Payment: 60 days after proof. Suit: within 2 years.
• Appraisers named within 20 days. Umpire within 15 days, or a judge appoints one.
• Coinsurance only at the insured's written request.
• Total loss pays the full policy amount. Maximum term: 5 years.
• A plaintiff recovers only if his or her fault is not greater than the defendant's.