The homeowners forms, Coverages A through F, perils, exclusions and loss settlement are covered in the national Homeowners guide. This guide covers the North Dakota statutes that govern residential property policies:

• cancellation, nonrenewal and declination (N.D.C.C. chapter 26.1-39)
• the credit information law (chapter 26.1-25.1)
• the valued policy law
• several claim-handling rules

Which policies the residential law covers (26.1-39-10)

• Covered: policies on real property of no more than four residential units, one of which is the named insured's principal residence, plus household personal property and personal liability.
• Not covered: workers' comp (WSI), auto, inland marine, residual market and commercial policies.
• Policy terms. A term shorter than six months is treated as six months. A term longer than one year, or with no fixed end, is treated as one year.

Cancellation (26.1-39-13 to 26.1-39-15)

Allowed reasons. After 60 days, or after a renewal, a policy may be canceled only for listed reasons, including:

• nonpayment
• fraud or material misrepresentation
• willful or reckless acts that increase a hazard
• a substantial change in the risk
• a building, fire or safety code violation that substantially increases a hazard

Notice. At least 30 days, or 10 days for nonpayment.

Five-day cancellation (26.1-39-14) applies to problem buildings, such as:

• a building unoccupied 60 consecutive days, except seasonal homes and secured buildings under construction or repair
• a building with at least 65% of its rental units unoccupied
• a building where fire repairs haven't begun within 60 days after the loss was adjusted
• property taxes unpaid for over a year
• no heat or water for 30 days
• outstanding vacate or demolition orders

Proof and reasons

• The insured may ask for the reason in writing at least 10 days before cancellation. The insurer answers within 10 days.
• With a USPS certificate of mailing or tracked first-class mail, receipt is conclusively proved on the third calendar day after mailing.

Nonrenewal (26.1-39-16)

• 45 days' written notice before expiration. Professional liability for legal and medical services needs 90 days.
• No notice is needed if the insurer sent a renewal bill or notice showing it's willing to renew.
• Proof of mailing is kept one year.
• A renewal with altered terms isn't a termination. Moving a policy to another company in the same holding company isn't a termination either, but the policyholder must be notified.

Declinations and prohibited reasons (26.1-39-11, 26.1-39-12, 26.1-39-17)

• Offering coverage through a different group company, or on different terms than requested, is a declination.
• Reasons are given within 21 days of a written request made within 90 days.
• An insurer may not decline or terminate because of:
  • race, religion, nationality, ethnic group, age, sex or marital status
  • a lawful occupation, unless the insurer limits its market to one occupation or related ones
  • another insurer's prior declination
  • prior coverage through a residual market
• A producer may not refuse an application for any of those reasons.
• Penalties. Up to $500 per violation, or $5,000 if willful and knowing (26.1-39-18).

Credit information (26.1-25.1)

• Covers personal insurance: private passenger auto, homeowners, motorcycle, mobile homeowners and noncommercial dwelling fire.
• Limits on use:
  • Credit can't be the sole basis to deny, cancel or nonrenew.
  • Scores can't use income, zip code, gender, marital status or similar factors.
  • An adverse action notice gives up to four primary reasons.
• Disclosure that credit may be used comes on the application or when it's taken.
• Disputes. If a credit dispute is resolved in the consumer's favor, the insurer re-rates within 30 days and refunds any overpayment.
• Agents. The insurer indemnifies agents who follow its credit procedures.

Claims rules

• Innocent coinsureds (26.1-39-24). When a loss comes from domestic violence and the perpetrator is criminally prosecuted, a coinsured who didn't take part can still collect. Payment may be limited to that coinsured's ownership interest.
• Reopened and supplemental claims (26.1-39-30). A reopened claim needs notice within one year after the date of loss. A supplemental claim needs notice within 12 months after the last payment for that part of the loss.
• Bad faith (26.1-39-29). A bad faith claim against a property insurer requires a final court judgment that the insurer breached the contract.
• Fire protection class (26.1-39-09.3). An insured may dispute the class within 30 days with a credible factual basis. The insurer then has 90 days to investigate.
• Managed repair programs (26.1-30-23). A policy that restricts the insured's choice of repair vendors must say so prominently on the declarations page and in a separate disclosure.
• Mandatory arbitration (26.1-30-22) requires a separate endorsement and the named insured's written acceptance on a separate form explaining the rights given up for a discount.
• Loss information (45-05-04). Insurers send it within 20 days of a request. It excludes reserves on open claims, and fees can't exceed 50 cents a page.

Total losses: the valued policy law (26.1-39-05)

• General rule. For a total loss of real property, the amount of insurance in the policy is the property's value and the measure of damages.
• Exception. If the loss happens within 60 days after the policy takes effect, or after an insured-requested limit increase of 25% or more, the insurer pays the lesser of the policy amount or what it would pay on a partial loss.
• Other structures count only if individually described with a value before the loss.
• Not covered by the law: personal property.

Common exam traps

• Homeowners nonrenewal notice is 45 days. Cancellation notice is 30 days, or 10 for nonpayment.
• A building unoccupied 60 consecutive days can be canceled on five days' notice.
• An insurer can't decline you because another insurer declined you.
• North Dakota's valued policy law applies to real property only, with a 60-day / 25% exception.