Free Idaho Property practice questions

Answer: D. At least 120 days before the action

Under Idaho Code Sec. 41-1841(1), an insurer planning a block cancellation or block nonrenewal must give the director written notice, setting out its reasons, no later than 120 days before the intended action. Subsection (3) counts nonrenewal of an entire line of insurance as a block action. Sixty days is the point at which subsection (2) deems the action approved unless the director has approved it earlier by order; it is not the advance-notice period. Thirty days does not appear in this section, and notice given after acting fails the requirement that notice come before the action.

Answer: C. A cancellation

The statute defines cancellation as the termination of a policy at any date other than its expiration date. February 15 falls before the June 1 expiration date, so ending the policy then is a cancellation. Ending a policy on its expiration date is what the same section calls nonrenewal, which is not what happened here. Neither expiration nor lapse is the term the section uses for an insurer ending coverage before the expiration date.

Answer: A. It is allowed, since an insurer may print or use forms describing the insured property

The standard fire policy statute lists exceptions to the rule that a fire policy must be on the standard form, and one of them lets an insurer print or use printed forms that describe and specify the property insured. A preprinted schedule of buildings and contents is that kind of form. That exception attaches no requirement of a separate approval order by the director and draws no line between domestic and foreign insurers. The standard form is therefore open to this addition, because the statute itself lists it among the permitted ones.

Answer: D. 120 days

The block cancellation statute requires an insurer planning block cancellations or block nonrenewals to give the director written notice no later than 120 days before the intended action, and the notice must set out the reasons for it. Sixty days is not the advance notice period; in this section it marks when the intended action is deemed approved. Thirty and 45 days are not periods this section uses.

Answer: A. Joint reinsurance, to the extent stated in section 41-1426

Subsection (3)(a) removes reinsurance from the rating chapter but keeps joint reinsurance within it, to the extent section 41-1426 provides. Joint reinsurance is the only form the subsection brings back. It names no carve-back for facultative placements, treaty cessions by domestic insurers or retrocessions, so each of those stays within the general reinsurance exclusion.

Answer: C. Insurance of a service contract that pays to repair a failed appliance

Item (5) of section 41-3603 excludes insurance of warranties or service contracts, including coverage that pays to repair, replace or service goods that fail because of a defect or ordinary wear. A personal auto policy, a commercial general liability policy and a homeowners policy appear nowhere on the section's exclusion list, so the act reaches them as direct insurance.

Answer: D. Vendor's single interest coverage protecting a lender

Idaho Code Sec. 41-3603(4) excludes from the act credit insurance, vendors' single interest insurance, collateral protection insurance and similar insurance protecting a creditor's interest in a creditor-debtor transaction. Coverage that protects a lender's interest in financed collateral is that kind of insurance. The act otherwise applies to all kinds of direct insurance, and homeowners, general liability and private passenger auto coverage appear nowhere in its list of exceptions.

Answer: A. It does not bar recovery, since the error was not fraudulent and none of the statutory grounds applies

Idaho Code Sec. 41-1811 treats statements in an application as representations, not warranties, and a misstatement defeats recovery only if it was fraudulent, was material to the acceptance of the risk or the hazard assumed, or would in good faith have led the insurer to decline the policy, charge a different premium rate, issue a smaller amount or withhold coverage for the hazard causing the loss. None of those conditions is present here. Because the statements are not warranties, literal inaccuracy does not void the policy, an incorrect statement alone does not defeat the claim, and the section provides no proportional reduction of the payment.

Answer: C. Insurance against physical damage to an aircraft and liability for its use

Idaho Code Sec. 41-1401(1) applies the rate chapter to property, marine and transportation, inland marine, casualty and surety insurance on Idaho risks, subject to stated exceptions, and subsection (3)(c) removes aircraft insurance, including damage to aircraft and liability from owning, maintaining or using them. Inland marine and commercial property insurance are within subsection (1). Surety is also within it; the carve-out reaches only surety that insures or guarantees employers' workers' compensation obligations.

Answer: D. It is valid and includes the usual policy terms, except where the binder clearly says otherwise

Idaho Code Sec. 41-1823(1) allows a binder or other temporary insurance contract to be made orally or in writing, and it treats the binder as including the usual terms of the policy it was given for, unless the binder's clear and express terms supersede them. So the oral binder is valid and is not limited to the terms spoken aloud. Under subsection (2), a binder ends at the issuance of the policy or endorsement, or at the policy expiration, whichever comes first, so it cannot run 90 days past issuance.