The national basics guides cover the core P&C concepts: insurable interest, indemnity, negligence, actual cash value and replacement cost, coinsurance and policy conditions. This guide collects the Vermont rules that apply across property and casualty lines:

• the comparative negligence rule
• cancellation, nonrenewal and renewal notices
• fire policy claim rules and the building valuation statute
• claim handling standards
• credit-based insurance scores
• the guaranty association

Vermont auto rules are in the Vermont Personal Auto Policy guide. Surplus lines rules are in the Vermont Other Casualty guide.

Negligence (12 V.S.A. § 1036)

Vermont uses modified comparative negligence. An injured person recovers if their own negligence was not greater than the combined negligence of the defendants. The award is reduced by the injured person's share of fault.

Cancellation and nonrenewal of property and casualty policies (8 V.S.A. §§ 3879 to 3885)

Reasons. After a policy has been in effect 60 days, or at any time for a renewal, the insurer may cancel only for:

• nonpayment of premium
• fraud or material misrepresentation affecting the policy or a claim
• violation of policy terms
• a substantial increase in hazard, and only with the Commissioner's prior approval

Notice:

Other notice rules:

• Notices go by certified mail. A nonpayment notice may use a certificate of mailing or similar USPS first-class tracking, but not a bulk mailing certificate (§ 3883).
• If renewal confirmation is late, coverage continues at the old premium for 45 days after the insurer confirms (§ 3882(b)).
• Even without notice, a policy ends when another policy covering the same property takes effect (§ 3881).
• The penalty is $2,000 per violation (§ 3885).
• These sections don't apply to workers compensation, which has its own 45-day notice under Title 21.

Commercial risks (8 V.S.A. §§ 4711 to 4713) also need 45 days' notice of cancellation, or 15 for nonpayment, with reasons. Nonrenewal also takes 45 days.

Terminated agents. If an insurer ends an agency contract, each policyholder may renew for one more annual period, and the agent earns the commission. Exclusive agents and agents terminated for listed causes are excepted (§ 3884).

Premium finance. A finance company must give at least 10 days' written notice of intent to cancel before it can ask the insurer to cancel (§ 7009).

Fire policy claims (8 V.S.A. §§ 3867 to 3869)

• A fire policy isn't void for a missing proof of loss until the insurer asks for it in writing and the insured fails to send it within 30 days.
• A defect in the proof is no defense unless the insurer points it out within 10 days and the insured doesn't correct it within 30 days.
• The loss is payable 60 days after the insurer receives satisfactory proof (§ 3868).
• Every fire policy on Vermont property is treated as made in Vermont (§ 3869).

Building valuation (8 V.S.A. §§ 3961 to 3968)

• An insured may ask the insurer to agree on the building's value. A written agreement fixes the value for the insurer's liability during the policy.
• The insured may file a valuation request with the Commissioner. The value must be set within 15 days.
• Each side lists at least three disinterested appraisers. The Commissioner picks one from each list and a third if they disagree.
• Each side pays its own appraiser and they split the third. An award by any two appraisers fixes the value.
• The fixed value holds for fire policies issued within three years, and a new valuation can't be required more often.
• The insurer may not charge a higher rate than for the same form with a coinsurance clause.
• An insurer that refuses can have its authority suspended for up to one year.

Liability policies (8 V.S.A. §§ 4203, 4205)

• The insured's bankruptcy doesn't release the insurer. An injured person with an unpaid judgment may sue the insurer up to the policy limits.
• Suit against the insurer is brought within one year after the loss amount is fixed by judgment or agreement.
• A false statement in the application bars recovery only if made with intent to deceive or if it materially affected acceptance of the risk (§ 4205).
• Liability policies in Vermont include pollution coverage by endorsement. A pollution exclusion needs an approved consent-to-rate application for a business with an identifiable pollution exposure, such as an oil tank of 1,000 gallons or more (Bulletin 111).
• Consent to rate means a rate above the filed rate, or narrower coverage, for a specific risk. It needs the insured's written application stating reasons and the Commissioner's approval (§ 4688(f)).

Claim handling (Reg. I-79-2)

The regulation covers all P&C lines except workers compensation, title and surety.

Other rules:

• An insurer without a Vermont claims office gives a toll-free number.
• Each payment comes with an explanation, such as depreciation or deductible.
• The insurer pays for known hidden damage.
• On request, the insurer gives the claimant a copy of the estimate.
• Matching: replacement must be like kind and quality with a reasonably uniform appearance within the same line of sight, at no cost to the insured beyond the deductible (§ 8(A)(6)).

Credit-based insurance scores (8 V.S.A. § 4727)

These rules apply to personal insurance: private passenger auto, homeowners, motorcycle, mobile home and noncommercial dwelling fire.

• No denial, cancellation or nonrenewal based solely on credit.
• Scores can't use income, gender, address, zip code, ethnic group, religion, marital status or nationality.
• Credit is updated at least every 36 months. The consumer may ask to be re-rated once a year at renewal.
• Insurers make reasonable exceptions for extraordinary life events such as catastrophes, serious illness, divorce, identity theft or military deployment.

Guaranty association (8 V.S.A. §§ 3611 to 3625)

The Vermont Property and Casualty Insurance Guaranty Association pays covered claims when a member insurer is liquidated.

• It has three accounts: workers compensation, automobile and all other.
• It pays claims under $500,000 each (workers compensation without that cap) and unearned premium over $25.
• Each member's yearly assessment is capped at 2% of its net direct written premium.
• It doesn't cover life, health, title, surety, credit, mortgage guaranty or ocean marine.
• A claimant must first use any other policy that covers the loss.
• Court cases in which the insolvent insurer is a party or must defend are stayed for up to six months so the association can defend them (§ 3625).

Captives

A captive insurer can't write personal auto or homeowners coverage (8 V.S.A. § 6002).

Common exam traps

• Cancellation and nonrenewal take 45 days. Cancellation for nonpayment takes 15, and so does cancellation for a substantial increase in hazard, which also needs the Commissioner's approval.
• The cancellation reason limits begin after 60 days.
• A fire loss is payable 60 days after proof. The insured has 30 days after a written request to file proof of loss.
• A claim is acknowledged within 10 business days and accepted or denied 15 business days after proof.
• Vermont bars recovery only when the injured person is more at fault than the defendants combined.
• The guaranty association cap is under $500,000, and unearned premium is covered over $25.