Property insurance principles are covered in the national Property Insurance Basics guide: perils and hazards, ACV and replacement cost, coinsurance and the loss conditions. This guide covers the Nebraska statutes behind those concepts that the Property exam tests:

• the standard fire policy
• the valued policy law
• warranties and misrepresentation
• cancellation notice
• rate and form rules

Definitions and contract rules

• Property line. It covers direct or consequential loss of or damage to property of every kind (Neb. Rev. Stat. 44-4054(1)(c)).
• Standard fire policy (44-501). Fire and lightning policies on Nebraska property must conform as nearly as practicable to the 1943 New York standard fire policy. With the Director's approval, a policy may exclude loss from nuclear reaction, radiation or radioactive contamination (44-501.01).
• Misrepresentation and warranties (44-358):
  • A misrepresentation or warranty defeats the policy only if it deceived the insurer to its injury.
  • A breach of a warranty or condition voids coverage only if the breach existed at the time of the loss and contributed to it.
• Suit limitation (44-357). A policy can't apply another state's law or shorten the time to sue below Nebraska's statute of limitations, unless Chapter 44 allows it.
• Attorney fees (44-359). An insured who wins a judgment on a policy is awarded a reasonable attorney's fee. This doesn't apply to workers' comp, or when the judgment doesn't beat a prior settlement offer.

Valued policy law (44-501.02)

• The rule. When real property is wholly destroyed by fire, tornado, windstorm, lightning or explosion, without criminal fault by the insured, the amount of insurance written in the policy is conclusively the property's value.
• Not covered by the law: flood and other perils, contents, and losses from the insured's criminal fault.

Cancellation and nonrenewal (44-522)

• Notice. 60 days' written notice stating the reason to cancel or nonrenew a property, marine or liability policy or binder. 10 days' notice for nonpayment, or for a policy with a term of 60 days or less.
• After 60 days in force, a policy may be canceled only for listed reasons:
  • nonpayment
  • material misrepresentation
  • a fraudulent claim
  • violation of terms
  • a substantial increase in risk
• Proof of mailing. A certificate of mailing proves receipt on the third calendar day.

Rates and forms (Property and Casualty Insurance Rate and Form Act, 44-7501 and following)

• Rate standards. Rates may not be excessive, inadequate or unfairly discriminatory (44-7502). Forms may not be ambiguous, misleading or deceptive.
• Effective dates. A rate filing may not take effect before the Director receives it (44-7508(2)).
• Consent to rate (44-7508(6)). An insurer may charge a higher rate for an unusual or extra-hazardous exposure with the insured's prior written consent. The consent is filed with the Director within 30 days after the coverage takes effect.
• Prior approval. Some filings need prior approval, including those for advisory organizations, assigned risk plans and medical professional liability (44-7506).

Property claim standards (210 NAC 60)

When paying a property claim, the insurer must:

• give the insured the ACV worksheet showing every deduction
• replace items in the area for a reasonably uniform appearance when replacements don't match
• include damage caused during repairs in the loss, unless excluded
• explain in writing any payment limited because property has nominal value
• not deny a claim for failure to exhibit property unless the file documents a breach

Common exam traps

• Nebraska's valued policy law covers five perils: fire, tornado, windstorm, lightning and explosion. Flood isn't one of them.
• A breach of warranty voids coverage only if it existed at the loss and contributed to it.
• Cancellation or nonrenewal notice is 60 days, with the reason. Nonpayment is 10 days.
• A consent-to-rate filing is due within 30 days after the effective date.