The national guides cover the P&C basics: perils, valuation, negligence and contract law. This guide adds the Utah rules on cancellation and nonrenewal (31A-21-303), notice, proof and suits (31A-21-312, 31A-21-313), rates and forms, claim settlement (R590-190) and liability policies. Questions on these come up on the Property, Casualty, P&C and Personal Lines exams.

Definitions

• Property insurance covers loss of or damage to real or personal property of every kind (31A-1-301).
• Casualty insurance means liability insurance.
• Personal lines are P&C coverages sold mainly for noncommercial purposes.
• Insurable interest in property is any lawful, substantial economic interest in the loss not happening (31A-21-104).
  • It's needed at the time of loss.
  • An insurer can't knowingly insure someone with no present or expected interest.

Cancellation and nonrenewal (31A-21-303)

Cancellation

• First 60 days of a new policy: the insurer may cancel, effective at least 10 days after written notice.

• After 60 days, or once renewed, cancellation is limited to:

  • nonpayment
  • material misrepresentation
  • a substantial change in the risk
  • substantial breach of contractual duties
  • for auto: revocation or suspension of the license of the named insured or a customary driver

  A claim alone isn't a ground.

• Notice:

  • 30 days for cancellation on grounds
  • 10 days for nonpayment on personal lines, and the notice must state the reason

• Commercial nonpayment: the notice also goes to named mortgagees, loss payees and lienholders, with a copy to the agent no later than the day the insured is notified.

• The insured may ask for the reasons. The insurer gives the facts within 10 working days.

• Notices must explain how to apply to any risk-sharing plan.

Nonrenewal and renewal

• Nonrenewal: at least 30 days' notice before expiration.
• Renewal premium notice: sent 14 to 45 days before the premium is due.
• Less favorable renewal terms: need 30 days' notice. If the notice is late, the old terms run until 30 days after it's sent.
• Not grounds for nonrenewal:
  • a call or inquiry about coverage that doesn't lead to a claim
  • auto: a single not-at-fault claim in 36 months by a driver 21 or older, or one speeding ticket of 10 mph or less
  • homeowners: a single non-preventable wind, hail or lightning claim in 36 months
• Multiyear policies may allow cancellation on 30 days' notice before an anniversary.
• A payment mailed through the U.S. Postal Service counts as made on its postmark date.
• Premium finance companies give 10 days' written notice before ordering cancellation (31A-21-305).

Notice, proof of loss and suits

• Notice to an authorized agent in Utah is notice to the insurer (31A-21-312).
• Late notice or proof doesn't bar recovery unless the insurer shows it was prejudiced.
• Mailing first-class to the insurer within the deadline is enough.
• Investigating a claim or accepting proofs doesn't waive the insurer's defenses.
• Suits on a first-party policy must be filed within 3 years after the loss began (31A-21-313).
  • The time is tolled during appraisal or arbitration.
  • No suit until 60 days after proof of loss, unless the insurer waives proof or denies the claim.
  • Policies can't shorten these periods.
• A breach of condition before the loss affects coverage only if it exists at the time of loss and increases the risk or contributes to the loss (31A-21-105).

Rates and forms

• Rates may not be excessive, inadequate or unfairly discriminatory (31A-19a-201).
• Use and file: rate filings are due within 30 days after the rates take effect. Workers comp is the exception, and must be filed 30 days before use (31A-19a-203, 31A-19a-405).
• A form can't be used until it's filed (31A-21-201).
  • The Commissioner may prohibit a form that's misleading or unfairly discriminatory.
  • Non-life forms must show the insurer's exact name and state of domicile.

Property claim settlement (R590-190-13)

• Actual cash value on residential fire and extended coverage is replacement cost at the time of loss minus depreciation.
  • On request, the insurer shows each depreciation deduction.
• Replacement cost: the insured pays only the deductible.
• Matching: repaired or replaced items must give a reasonably uniform appearance.
• Physical damage caused by the repair itself is included in the loss.

Liability policies (31A-22-201 to 31A-22-204)

• The insured's bankruptcy doesn't reduce the insurer's liability to third parties.
• If a judgment against the insured goes unpaid, the injured party may sue the insurer up to the coverage.
• A liability policy can't be retroactively cancelled to a third party's detriment after the injury.
• A claims-made limitation must be stated conspicuously on the cover page.

Certificates of insurance (31A-22-1703, 31A-22-1704)

• A certificate isn't a policy. It can't change coverage.
• It can't refer to a construction or service contract.
• Its form must be filed.

Residual markets and other rules

• A joint underwriting association may be created only after a market assistance program has run at least 30 days without meeting the need (31A-2-214).
  • JUAs can't be created for life, A&H, workers comp, earthquake, medical malpractice or private passenger auto liability.
  • Deficits are recovered through future rates.
• Motorboat liability minimums are 25/50/15, or $65,000 combined (31A-22-1503).
• Home warranty companies need security. A surety bond is $50,000, rising to $100,000 when more than 2,500 contracts are in force (R590-166).

Common exam traps

• After 60 days, cancellation needs grounds plus 30 days' notice, or 10 days for nonpayment.
• Nonrenewal: 30 days' notice.
• First-party suits: within 3 years of the loss.
• Late notice bars recovery only if the insurer was prejudiced.
• Rates are use and file within 30 days. Workers comp rates are filed 30 days before use.
• A certificate of insurance isn't a policy.