Here is the framework for the Property and Casualty Exam that is applicable in all states for 2025.
1. General Insurance Knowledge
- Insurance Concepts and Principles
- Risk management: Types of risk (pure vs. speculative), methods of handling risk
- Law of large numbers and underwriting
- Elements of an insurance contract (offer, acceptance, consideration, legal purpose)
- Insurance Markets
- Types of insurers: Stock, mutual, fraternal, reciprocal
- Private vs. government insurance programs
- Reinsurance and its function
- Regulatory Environment
- Role of the Department of Insurance (DOI)
- Federal and state regulations
- Unfair trade practices and consumer protections
2. Property Insurance
- Types of Policies
- Homeowners (HO-1 through HO-8)
- Dwelling policies
- Commercial property policies
- Inland marine insurance
- Flood insurance (NFIP)
- Earthquake insurance
- Policy Structure and Provisions
- Declarations, insuring agreements, conditions, exclusions
- Deductibles, coinsurance, and limits of liability
- Additional coverages (e.g., debris removal, ordinance or law)
- Valuation Methods
- Actual cash value (ACV) vs. replacement cost
- Functional replacement cost
- Agreed value and market value
- Policy Applications and Underwriting
- Risk evaluation
- Inspection reports and credit scoring
- Common property hazards and underwriting considerations
3. Casualty Insurance
- Types of Policies
- Auto insurance: Personal (PAP) and commercial (BAP)
- General liability insurance
- Professional liability (E&O, D&O, malpractice)
- Workers’ compensation insurance
- Umbrella and excess liability
- Policy Structure and Provisions
- Liability limits: Split limits vs. single limits
- Coverage types: Bodily injury, property damage, personal and advertising injury
- Conditions and exclusions
- Specialized Coverages
- Cyber liability insurance
- Employment practices liability
- Surety bonds and fidelity bonds
4. Key Concepts for Both Lines
- Endorsements
- Purpose and use in customizing coverage
- Common endorsements (e.g., additional insured, loss payable clause)
- Claims Process
- Steps in the claims process
- Role of adjusters
- Appraisal and arbitration provisions
- Insurance Terms
- Negligence, liability, indemnity, proximate cause, subrogation
5. Ethics and Market Conduct
- Ethical practices in sales and marketing
- Suitability and needs analysis
- Prohibited practices (e.g., rebating, twisting, misrepresentation)
- Consumer rights and complaint resolution
6. State-Specific Laws and Regulations
- Licensing requirements: Pre-licensing hours, application, exams
- Continuing education mandates
- State-mandated coverages (e.g., uninsured motorist, PIP)
- Regulatory requirements for filing claims, policy cancellations, and non-renewals
- Unique state programs (e.g., FAIR Plans for high-risk properties)
7. Exam Preparation
- Study techniques and time management
- Practice exams with general and state-specific questions
- Understanding the exam format (e.g., multiple choice, adaptive testing)
Implementation Notes
- Pre-Licensing Hours: Vary by state (typically 20–40 hours for each line).
- Exam Content Split: Typically divided into general insurance concepts and state-specific rules.
- Educational Materials: Should comply with NAIC guidelines and state-specific requirements for 2025.
- Customization: Incorporate local laws, mandatory coverages, and regional risks (e.g., hurricanes, wildfires, earthquakes).
Key Differences in Property and Casualty Insurance by State
- Pre-Licensing Education Requirements
- Vary in hours required and specific topics (e.g., coastal vs. inland risks).
- Some states require separate training for workers’ compensation or flood insurance.
- Licensing Exam
- Content and structure differ; some states focus more on specific risks like hurricanes or earthquakes.
- Additional state-specific questions on FAIR Plans or residual markets.
- State-Mandated Coverages
- Requirements for uninsured/underinsured motorist coverage differ.
- Personal Injury Protection (PIP) is mandatory in no-fault states but optional elsewhere.
- Specific property insurance mandates (e.g., hurricane deductibles in coastal states, wildfire risk coverage).
- Regulation of Rates and Policies
- States differ in approving policy forms and rate filings.
- Some states have prior approval requirements for rate changes, while others are “file and use.”
- Claims Handling Standards
- Deadlines for acknowledging claims, investigation, and payment vary by state.
- State-Specific Insurance Programs
- FAIR Plans (Fair Access to Insurance Requirements) for high-risk properties.
- Wind pools or beach plans in hurricane-prone states.
- Earthquake insurance requirements in seismic zones (e.g., California Earthquake Authority).
- Workers’ Compensation
- States regulate workers’ compensation differently (e.g., monopolistic states like Ohio require state-funded insurance).
- Continuing Education (CE)
- CE hours and specific requirements (e.g., flood insurance CE in flood-prone states).
- Ethics CE mandates.
- Unique Legal Doctrines
- Doctrine of contributory vs. comparative negligence for liability claims.
- State-specific variations in tort reform laws affecting liability policies.
- Cancellation and Non-Renewal Rules
- Notice periods for policy cancellations or non-renewals differ (e.g., 30 days vs. 60 days).
Key Areas for Customization
- Exam Content:
- States with unique hazards (e.g., Florida’s focus on hurricane insurance or California’s on wildfire insurance) include these in their licensing exams.
- Mandated Benefits and Policy Features:
- States often have specific requirements for health and auto insurance coverage.
- Regulatory Agencies:
- The level of oversight and role of the Department of Insurance varies, influencing how licensing and policies are handled.
Several states have enacted changes to their minimum auto insurance liability coverage requirements for 2025 to better protect drivers and align with current economic conditions. Here’s a summary of the key updates:
California
- Effective Date: January 1, 2025
- Previous Minimums:
- $15,000 for bodily injury or death per person
- $30,000 for bodily injury or death per accident
- $5,000 for property damage per accident
- New Minimums:
- $30,000 for bodily injury or death per person
- $60,000 for bodily injury or death per accident
- $15,000 for property damage per accident
- Details: This adjustment, the first in over 50 years, aims to provide better financial protection for drivers in the event of an accident.
North Carolina
- Effective Date: July 1, 2025
- Previous Minimums:
- $30,000 for bodily injury per person
- $60,000 for bodily injury per accident
- $25,000 for property damage per accident
- New Minimums:
- $50,000 for bodily injury per person
- $100,000 for bodily injury per accident
- $50,000 for property damage per accident
- Details: These increases, the first in over two decades, aim to ensure that drivers have sufficient coverage to protect themselves and others in the event of an accident.
Virginia
- Effective Date: January 1, 2025
- Previous Minimums:
- $30,000 for bodily injury per person
- $60,000 for bodily injury per accident
- $20,000 for property damage per accident
- New Minimums:
- $50,000 for bodily injury per person
- $100,000 for bodily injury per accident
- $25,000 for property damage per accident
- Details: In addition to increasing minimum liability limits, Virginia now requires all drivers to carry insurance, eliminating the option to pay an uninsured motor vehicle fee.
Utah
- Effective Date: January 1, 2025
- Previous Minimums:
- $25,000 for bodily injury per person
- $65,000 for bodily injury per accident
- $15,000 for property damage per accident
- New Minimums:
- $30,000 for bodily injury per person
- $65,000 for bodily injury per accident
- $25,000 for property damage per accident
- Details: As a no-fault state, Utah also requires drivers to carry personal injury protection (PIP) coverage.