Insurance Basics
15%of exam
Property
25%of exam
Casualty + Liability
35%of exam
Iowa Law + Regulation
25%of exam
IID20/40/1551% BarFAIR PlanIIGALicensing + CE
Quick Facts
- Exam
- IA Prop + Cas
- Questions
- 83 / 85 scored
- Pass
- 70%
- Time
- 120 min each
- Pre-license
- None required
- Fee
- $49 / $69 both
- Vendor
- Pearson VUE
- Regulator
- IID
Policy Parts: DICE
D-I-C-E builds every policy
D: DeclarationsI: Insuring agreementC: ConditionsE: Exclusions
ACV vs Replacement Cost
ACV
- Minus depreciation
- Insured bears wear
- Lower payout
RCV
- No depreciation
- Like kind/quality
- Repair often required
Depreciated vs full
Key Terms
- Peril
- Cause of loss
- Hazard
- Increases chance of loss
- Indemnity
- Restore, no profit
- Insurable interest
- Financial stake at loss
- Subrogation
- Insurer recovers from third party
- Salvage
- Insurer sells damaged property
- Law large numbers
- Bigger pool predicts losses
- Aleatory
- Unequal exchange, uncertain event
Peril vs Hazard
Peril
- Cause of loss
- Fire, theft, wind
- The event
Hazard
- Increases chance
- Physical/moral/morale
- The condition
Cause vs condition
Policy Parts (DICE)
- Declarations
- Who/what/limits/premium
- Insuring agreement
- Promise to pay
- Definitions
- Defined terms
- Conditions
- Duties of parties
- Exclusions
- Not covered
- Endorsements
- Modifications/riders
- Adhesion
- Take-it-or-leave-it
- Reasonable expectations
- Ambiguity favors insured
Settlement Terms
- ACV
- Replacement minus depreciation
- RCV
- No depreciation deducted
- Coinsurance
- Carry % or penalty
- Deductible
- Insured retention
- Pro rata
- Share by limits
- Equal shares
- Each pays equally
- Representation
- Believed-true statement
- Warranty
- Guaranteed-true, part of contract
HO Forms
4 rent, 6 condo, 8 old
HO-4: renterHO-6: condoHO-3: open dwellingHO-5: open bothHO-8: older home
Named vs Open Peril
Named-peril
- Listed perils only
- Insured proves cause
- Narrower
Open-peril
- All but excluded
- Insurer proves exclusion
- Broader
Burden of proof shifts
Which HO/DP Form?
- Renter, no building→HO-4(Tenant)
- Condo unit owner→HO-6(Interior + improvements)
- Owner, broadest cover→HO-5(Open both)
- Owner, common choice→HO-3(Open dwelling)
- Older home, market low→HO-8(Repair cost)
- Rental dwelling, open→DP-3(Landlord)
- Working farmstead→Farmowners(Not HO-3)
- High-value jewelry→Floater(Schedule item)
Homeowners Forms
- HO-2
- Broad named-peril both
- HO-3
- Open dwelling, named contentsCommon
- HO-4
- Renters (tenant) contents
- HO-5
- Open-peril both
- HO-6
- Condo unit-owner
- HO-8
- Older home, repair cost
- Section I
- Property A-D
- Section II
- Liability E + F
HO/DP Coverages
- Coverage A
- Dwelling
- Coverage B
- Other structures
- Coverage C
- Personal property
- Coverage D
- Loss of use / rent
- Coverage E
- Personal liability
- Coverage F
- Medical payments to others
- Special limits
- Cash, jewelry, furs caps
- Floater
- Schedule high-value items
Dwelling + Iowa Weather
- DP-1
- Basic named-peril, ACV
- DP-2
- Broad named-peril, RCV
- DP-3
- Open-peril dwelling
- Wind/hail deductible
- % of Coverage A
- ACV roof
- Depreciated hail settlement
- Flood
- NFIP or private only
- Farmowners
- Dwelling + farm package
- Business income
- Lost profit, continuing expense
PAP Coverages
A liability, B med, C UM, D damage
A: liabilityB: medicalC: UM/UIMD: your auto
Occurrence vs Claims-made
Occurrence
- Injury in period
- Any filing date
- No tail needed
Claims-made
- Claim in period
- Retroactive date
- Tail/ERP extends
When it happened vs filed
Which Coverage Applies?
- You hurt a guest→Coverage E(Liability)
- Guest minor injury→Coverage F(MedPay, no fault)
- Auto hits third party→PAP Part A(Liability)
- Hail dents your car→PAP Part D OTC(Comprehensive)
- Other driver uninsured→PAP Part C(UM)
- Business BI/PD claim→CGL Cov A(Occurrence)
- Worker injured on job→Iowa WC(Exclusive remedy)
- Market rejects dwelling→FAIR Plan(Last resort)
Personal Auto (PAP)
- Part A
- Liability BI/PD
- Part B
- Medical payments
- Part C
- UM/UIM
- Part D
- Damage to your auto
- Collision
- Impact or overturn
- OTC
- Hail, theft, glass, animals
- UM
- At-fault driver uninsured
- UIM
- At-fault limits too low
Commercial Lines
- CGL Cov A
- BI/PD liability
- CGL Cov B
- Personal/advertising injury
- CGL Cov C
- Medical payments
- Aggregate
- Total cap, policy period
- BAP symbol 1
- Any auto, broadest
- BOP
- Property + liability package
- Surety bond
- Guarantees principal performs
- Fidelity bond
- Employee dishonesty loss
Liability + Workers Comp
- Negligence
- Duty, breach, cause, damages
- Bodily injury
- Physical harm to person
- Property damage
- Damage/loss of use
- Vicarious liability
- Liable for another's acts
- Absolute liability
- No-fault, dangerous activity
- WC threshold
- One employee triggers
- WC notice
- Employee: 90 days
- WC benefits start
- Within 11 days
Iowa Auto Limits
20 per person, 40 accident, 15 PD
20: BI/person40: BI/accident15: property damageAt-fault tort
FAIR Plan vs IIGA
FAIR Plan
- Cannot find coverage
- Basic property only
- Agent-submitted
IIGA
- Insurer insolvent
- $300k claim cap
- Admitted P&C only
Availability vs insolvency
Iowa Law + Regulation
- IID
- Iowa Insurance Division
- Commissioner
- Heads IID, enforces code
- Ch. 505-522B
- Insurance + producer law
- 20/40/15
- Auto minimum limits
- At-fault (tort)
- Negligent driver pays
- 51% bar
- Modified comparative fault
- No PIP
- PIP not mandatory
- UM/UIM offer
- Must offer; written reject
Twisting vs Churning
Twisting
- Deceptive replacement
- Often new insurer
- Harms client
Churning
- Same insurer
- Uses existing values
- New commissions
Both abuse replacement
Iowa Consumer + Producer
- FAIR Plan
- Property insurer of last resort
- IIGA / 515B
- Pays claims if insolvent
- IIGA cap
- $300k per covered claim
- Pre-license
- None required
- CE
- 36 hrs/3 yrs, 3 ethics
- License term
- 3 years, birth month
- Exam validity
- 90 days to apply
- Address change
- Notify IID in 30 days
Common Traps
Cause vs condition
Peril = cause of loss ≠ Hazard = increases chance
ACV vs replacement
ACV minus depreciation ≠ RCV full like-kind
Renter vs condo
HO-4 is renters ≠ HO-6 is condo
Wind vs flood
Wind/hail on HO policy ≠ Flood needs NFIP
Iowa comparative fault
50% still recovers ≠ 51% recovers nothing
FAIR vs guaranty
FAIR = no market ≠ IIGA = insolvency
MedPay vs liability
Coverage F no-fault ≠ Coverage E needs liability
Last Minute
- 1.DICE = Declarations, Insuring, Conditions, Exclusions
- 2.Peril = cause; hazard = condition
- 3.ACV = depreciated; RCV = full
- 4.HO-4 renter; HO-6 condo
- 5.PAP: A liability, C UM
- 6.Iowa auto = 20/40/15, at-fault
- 7.Iowa fault = 51% bar (Ch. 668)
- 8.FAIR Plan = last resort; IIGA = insolvency
- 9.No pre-license; 36 CE/3yrs
- 10.Two exams: Property + Casualty, 70%
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