Oklahoma's property and casualty basics questions draw on a handful of statutes: the binder law, modified comparative negligence, the standard fire policy printed in 36 O.S. 4803(G), and the cancellation, nonrenewal and claim-inquiry rules. General principles (contracts, indemnity, insurable interest, hazards, negligence, ACV vs. replacement cost) are in the national basics guides. This page covers only what Oklahoma adds.

Binders (36 O.S. 3622)

• A property or casualty binder may be oral or written. It includes the usual terms of the policy it binds.
• A binder lasts until the policy is issued or 90 days from its effective date, whichever is shorter.
• It can be extended beyond 90 days only with the Commissioner's written approval or as the Commissioner's rules allow.
• The binder statute doesn't apply to life or accident and health insurance.
• For auto, a binder issued while a policy is pending satisfies the financial responsibility law (47 O.S. 7-324(k)).

Negligence: modified comparative fault (23 O.S. 13-14)

• A plaintiff's damages are reduced by the plaintiff's own share of fault.
• Recovery is barred only when the plaintiff's negligence is greater than the defendant's.
• Example: a plaintiff found 30% at fault with $100,000 of damages recovers $70,000.
• A plaintiff who is exactly 50% at fault still recovers half.

The Oklahoma standard fire policy (36 O.S. 4803(G))

Oklahoma prints its standard fire policy in the statute. The numbers are tested directly.

Coverage

• Insured perils: fire, lightning, and removal from premises endangered by those perils. Other perils are added by endorsement.
• Removed property is covered pro rata at each place it is moved to, for 5 days.

What isn't covered

• Theft is not covered.
• Currency, deeds and securities are uninsurable and excepted.
• Coverage is suspended while a building is vacant or unoccupied beyond 60 consecutive days.

Cancellation

• The insurer may cancel with 5 days' written notice and returns premium pro rata.
• A mortgagee gets 10 days' notice.
• When the insured cancels, the refund is figured on the short-rate basis.

Appraisal

• After a written demand, each side names an appraiser within 20 days.
• If the appraisers can't agree on an umpire within 15 days, a district court judge in the county of the loss picks one.

Payment and suit

• A loss is payable 60 days after proof of loss is received and the amount is ascertained.
• A lawsuit must be started within 12 months after the loss begins.

Assignment

• The policy may be assigned only with the insurer's written consent.

Expiration time

• Oklahoma fire policies and auto liability policies expire at 12:01 a.m. Standard Time (36 O.S. 4803.1, 3635.1).

Related fire statutes

• Overinsurance (36 O.S. 4804): if a building insured for more than its value is totally destroyed, the insured recovers the actual value plus a refund of the premium paid on the excess, with 6% interest.
• Proof of loss (36 O.S. 4805): to defend on the grounds that a sworn proof of loss wasn't filed within 60 days, the insurer must show it furnished two blank proof forms with a conspicuous bold warning. These requirements can't be waived.

Policy terms and treatment of insureds

• Premium refunds: every approved P&C policy must explain how premium is refunded if the insured cancels early (36 O.S. 1241.1).
• Claim inquiries: asking whether a loss is covered, without filing a claim, can't lead to a rate increase, cancellation or refusal to renew. This applies to any P&C policy (36 O.S. 940).
• Unfair discrimination: insureds with substantially like insuring, risk and exposure factors may not be treated differently (36 O.S. 1204(7)(c)).

Commercial cancellation and nonrenewal (36 O.S. 3639)

Scope

• Commercial property, casualty, auto, marine and fire policies.

Midterm cancellation

• After a policy has been in effect more than 45 business days, or after renewal, it may be canceled only for listed reasons. Examples:
  • Nonpayment.
  • Fraud.
  • Increased hazard.
  • Loss of or substantial change in reinsurance.
• The insured gets at least 10 days' notice.

Nonrenewal

• Notice is due at least 45 days before expiration.
• If notice is late, coverage continues until 45 days after the notice is mailed, at a pro rata premium.
• Moving the insured to another company in the same group is not a nonrenewal.

Renewal changes

• A premium increase, deductible change or reduction in limits or coverage needs 45 days' notice, unless it is part of a class-wide filed change.

Proof of notice

• Proof of mailing to the address in the policy is sufficient proof that notice was given.

Common exam traps

• Binders: 90 days or until the policy issues, whichever is shorter. The rule doesn't apply to life or health.
• Oklahoma's bar is "greater than." A plaintiff at 50% fault still recovers half.
• Standard fire policy: 5 days' notice to the insured but 10 days' to the mortgagee; 60 days vacancy; 12 months to sue; theft is excluded.
• Short rate vs. pro rata: insured cancels = short rate; insurer cancels = pro rata.
• Commercial lines: 45 business days before the cancellation limits apply, 10 days' cancellation notice, 45 days for nonrenewal.