Solve mixed cases and repair your weak spots

Introduction

A mixed case is a short story that could come from any part of the course: a kitchen fire, a late license renewal, a missing notice, a terrorism loss. You do not need to guess which chapter it came from. Start by asking what decides this question. Then open that document, find the exact clause, check every condition, and say which fact settled the answer.

This lesson teaches that routine and runs it on four kinds of cases: policy cases, payment arithmetic, Nevada law, and a federal program. It then shows you how to name the type of mistake behind a wrong answer, so you can come back later and retry that skill on new examples.

All people, businesses, policies and dollar amounts are invented. When a case supplies policy wording, that wording is an assumption for that case. It is not a claim about every real policy.

What you will be able to do

• Solve a mixed property case: choose the document that decides it, find the clause, and explain the decision in one or two sentences.
• Read a policy in order: first the promise, then the exclusions, then the dollar amount.
• Calculate a payment from stated deductible, limit and coinsurance terms.
• Tell a general policy concept apart from a Nevada legal requirement or a federal program rule.
• Name the type of error behind a wrong answer, then retry that skill on a new example after a delay.

Before you start

You need basic reading and arithmetic. Every rule used here is restated briefly before you practice it. Earlier lessons give fuller explanations, and the links point to them. If you have not set up a study schedule yet, see Choose your exam and build a study routine.

The four-question routine for any mixed case

Ask these four questions in order. Each one prevents a specific kind of mistake.

1. What decides this: the policy's words, Nevada law, or a federal program? - A policy is the written contract between the insurer and the policyholder. - A Nevada statute is a law passed by the Nevada Legislature. Statutes are collected in the Nevada Revised Statutes (NRS). - A Nevada regulation is a rule adopted by a state agency under a statute. Regulations are collected in the Nevada Administrative Code (NAC). - The Commissioner is Nevada's Commissioner of Insurance, the state official who regulates insurance. - A federal program rule comes from federal law or the Code of Federal Regulations (CFR), which holds federal agency rules.

Choosing the wrong source is the first way to get a case wrong.

2.

Which clause or section answers the question that was asked? A policy has separate parts that do separate jobs. If the question is "is this covered?", the limit (the dollar maximum) is the wrong part to read.

3.

Do the facts meet every condition, including the exceptions? Rules have conditions, such as "at least 70 days" or "previously authorized by the insured." They also have exceptions, such as "does not apply if coverage is at least $1,000,000." One missed condition can reverse the answer.

4.

What is the answer, and which fact decided it? Write one sentence: the decision, the clause, and the deciding fact. If you cannot name the deciding fact, you guessed.

Reading a policy: promise, then exclusions, then amount

A policy answers "is this covered?" and "how much is paid?" in different places. Read them in this order:

• The insuring agreement is the insurer's main promise: what it agrees to pay for. A promise to cover direct physical loss means the property itself was physically damaged, destroyed or stolen.
• Exclusions are stated things the policy will not cover. An exclusion can name a cause, a type of loss, or a type of property.
• The limit is the most the policy pays for a covered loss.
• The deductible is an amount subtracted from what would otherwise be paid. The policyholder bears that amount.

Policies build the promise in two different ways:

• An all-risk policy (also called open perils) covers any cause of loss except the causes the policy names as exclusions. With this kind of policy, ask: is the cause excluded?
• A named-peril policy covers only the causes of loss it lists. A peril is a cause of loss, such as fire. With this kind of policy, ask: is the cause on the list?

A real example of the first type is the Homeowners 3 Special Form (HO 00 03 10 00). Its dwelling coverage starts with a broad promise to insure against risk of direct physical loss. The next item says the insurer does not insure loss excluded under the form's Section I Exclusions. The promise and the exclusions must be read together.

Worked case: a kitchen fire

Policy A (invented, homeowners-style) supplies these terms: - Promise: "We insure against risk of direct physical loss to the dwelling." - Exclusions: flood, meaning water from a river or lake overflowing onto the land. - Dwelling limit: $300,000. - Deductible: $1,000 per occurrence. - No coinsurance clause.

Facts: A kitchen fire damages the walls. Repairs cost $30,000.

1. What decides it? The policy's words. No law or program is involved.
2. Promise: Fire damage to the walls is direct physical loss to the dwelling, so the promise reaches it. Exclusions: Fire is not listed.
3. Amount: $30,000 − $1,000 deductible = $29,000. That is below the $300,000 limit.
4. Answer: Policy A pays $29,000. The fire is direct physical loss, and fire is not an excluded cause.

Change one fact: A river overflows and causes the same $30,000 of damage. The promise still reaches it, because water damage is direct physical loss. But the flood exclusion removes it. The payment is $0, and the limit never enters the reasoning.

The tempting mistake: "The limit is $300,000, so a $30,000 loss is covered." A limit is a ceiling on payment for a loss that is already covered. It does not make anything covered. The builders risk form CP 00 20 shows this clearly: its limits section says the most the insurer will pay in one occurrence is the limit shown in the declarations. That sentence sets a maximum, not a coverage decision.

For more practice reading homeowners losses, see Map a homeowners loss to the right coverage.

Try it: a cargo policy

Policy B (invented) covers a produce wholesaler and supplies these terms: - Promise: pays for direct physical loss to the business's goods while carried in the business's own truck within Nevada, Arizona and Utah. - Exclusions: loss caused by delay; goods already sold and delivered. - Limit: $25,000 per shipment. - Deductible: $500.

Decide each case and name the clause that decided it.

1. The truck slides off an icy road in Utah. Goods worth $8,000 are crushed.
2. The truck breaks down in Nevada. The produce arrives two days late and spoils. Nothing else is damaged.
3. The truck rolls over in California. Goods worth $8,000 are crushed.

Calculating a payment under a coinsurance clause (a "carry enough insurance" rule)

A coinsurance clause is a policy term that reduces the payment when the policyholder bought less insurance than a stated percentage of the property's value. The clause does not take away coverage. It reduces the payment in proportion to the shortfall.

Policy C (invented commercial building policy) supplies these terms: - Coinsurance percentage: 80%. - Deductible: $2,000. - Limit: $300,000. - Order of calculation, as stated by this policy: 1. Required amount = 80% × the building's value at the time of loss. 2. If the limit carried is at least the required amount, there is no reduction. If not, multiply the loss by (carried ÷ required). 3. Subtract the deductible. If the result is below zero, the policy pays $0. 4. The policy never pays more than the limit.

Facts: The building is worth $500,000 at the time of loss. The covered loss is $40,000.

• Required amount: 80% × $500,000 = $400,000.
• Carried: $300,000. That is less than $400,000, so a reduction applies.
• Ratio: $300,000 ÷ $400,000 = 0.75. The owner carried three-quarters of what the clause asked for, so the policy pays three-quarters of the loss before the deductible.
• $40,000 × 0.75 = $30,000.
• $30,000 − $2,000 = $28,000. This is below the $300,000 limit.

Change one fact: The owner carried $400,000 instead. Now carried equals required, so there is no reduction: $40,000 − $2,000 = $38,000. The $10,000 difference between the two answers is entirely the coinsurance reduction.

Tempting mistakes:

• Dividing by the full value instead of the required amount. $300,000 ÷ $500,000 = 0.60, which gives $40,000 × 0.60 − $2,000 = $22,000. This is wrong because the clause compares what you carried with the required amount ($400,000), not with the full value.
• Subtracting the deductible first. ($40,000 − $2,000) × 0.75 = $28,500. This is wrong under Policy C's stated order. A different policy could state a different order, so read the order the policy gives you.
• Paying the limit. $300,000 is the ceiling, not the payment.

Boundaries to check: - Zero floor: With the same 0.75 ratio, a $2,400 loss becomes $1,800, and $1,800 − $2,000 is below zero. The payment is $0, not a negative number. - Limit cap: If a calculation ever produced more than $300,000, the payment would be $300,000.

Fuller practice is in Calculate deductibles, limits and coinsurance.

Try it: a different building

Policy D (invented) supplies these terms: 80% coinsurance, $1,000 deductible, and the same order of calculation as Policy C. The building is worth $250,000. The owner carries $160,000. The covered loss is $25,000.

1. What does Policy D pay?
2. What would it pay if the owner carried $210,000 instead?

Telling a general policy concept from a Nevada requirement

These two kinds of rules answer different questions:

• A general policy concept answers: what does this contract say? Insuring agreements, exclusions, limits, deductibles and coinsurance all work this way. The answer comes from the words of the particular policy in the case.
• A Nevada requirement answers: what does the law require someone to do? It is a statute or regulation that sets duties for insurers, producers and others. A producer is a person licensed to sell, solicit or negotiate insurance. A Nevada requirement can limit what an insurer may do, even when the policy's wording says otherwise.

Signals that a case is a Nevada-law question: it names the Commissioner; it involves a license; or it counts days from a notice, from a receipt, or from a renewal date.

What these Nevada rules do not assume: For the cancellation, nonrenewal and binder rules below, assume that the policy is one these sections apply to. The sections apply to binders and to contracts whose general terms the Commissioner must approve or may disapprove. The Commissioner may exempt some classes by rule. Also, a policy may give the policyholder more favorable terms than the cancellation and nonrenewal sections require.

Ending a policy early or declining to continue it

These two terms are easy to confuse:

• Cancellation means the insurer ends the policy before its term is over.
• Nonrenewal means the insurer declines to continue the policy after the term ends.

Cancellation (NRS 687B.320). This section applies to a policy that has been in effect for at least 70 days or has been renewed. It does not apply to a policy of what the statute calls industrial insurance. For a policy it covers, the insurer may cancel before the end of the agreed term, or before one year from the effective date if that comes first, only on listed grounds. The grounds are: - failure to pay premium when due; - the insured's conviction of a crime arising from acts that increase the hazard insured against; - discovery of fraud or material misrepresentation in obtaining the policy or presenting a claim; - discovery of an act, omission or violation of a policy condition that occurred after the first effective date of the current policy and substantially and materially increases the hazard; - a material change in the risk, after the first effective date of the current policy, that substantially and materially increases the risk of loss; - a Commissioner determination that the insurer's premium volume threatens its solvency or is hazardous to policyholders, creditors or the public; - a Commissioner determination that continuing the policy would violate the insurance code.

How much notice: - Nonpayment: the cancellation takes effect at least 10 days after the notice is delivered or mailed. - Any other ground: at least 30 days.

What the notice must be (NRS 687B.310): It must be personally delivered, or mailed first class or certified, to the insured's last address known to the insurer. It must state the effective date and include a written explanation of the specific reasons.

Nonrenewal (NRS 687B.340). The policyholder has a right to renewal unless the insurer mails or delivers a notice of intent not to renew, before the policy's expiration date, by at least: - 60 days for commercial or business policies; - 30 days for all other policies.

If the insurer misses this deadline, it must provide a policy on terms identical to the expiring policy. This section does not apply if: - the policyholder accepted replacement coverage; - the policyholder requested or agreed to the nonrenewal; or - the policy is expressly designated nonrenewable by a clause the Commissioner approved or is deemed to have approved.

Worked case. A homeowners policy has been in effect for 100 days. It says: "We may cancel at any time for any reason with 10 days' notice." The insurer decides it simply wants fewer policies in that neighborhood and mails a 10-day notice.

1. What decides it? Nevada law. The question is whether the insurer may cancel, and the statute limits the policy's wording.
2. Section: NRS 687B.320. The 100 days is at least 70, so the section applies.
3. Grounds: "Wanting fewer policies" is not on the list. The solvency ground requires a determination by the Commissioner, and the facts state none.
4. Answer: The cancellation is not permitted on these facts. The policy's "any reason" wording does not override the statute.

Change one fact: The insurer discovers the premium was never paid. Nonpayment is a listed ground, so the cancellation can take effect at least 10 days after the notice is delivered or mailed.

Change a different fact: The ground is a material misrepresentation on the application. The notice period becomes 30 days.

Second worked case. A business policy expires December 31. The insurer mails a nonrenewal notice 50 days before that date. Commercial policies need 60 days, so the notice fails. The insurer must provide a policy on identical terms, unless one of the listed exceptions applies.

See Nevada cancellation, nonrenewal and temporary binders for more.

Temporary coverage before the policy is issued (binders)

A binder is an oral or written contract for temporary insurance. It is used when a policy is not issued right away, to show that coverage attaches at a specified time and continues until the policy is issued or the risk is declined. The rules:

• Who may issue one: only an agent appointed by the insurer that will issue the policy.
• How long it lasts: no more than 90 days. The Commissioner may approve, in writing, extensions of 30 days at a time.
• Written binders: must be on forms the Commissioner approved. One copy must be delivered in person or mailed first class to both the insured and the insurer within 24 hours after the binder becomes effective.
• Binders for coverage under $1,000,000: must contain a statement, in at least 10-point bold type, warning about the penalties for refusing the binder as proof of insurance.
• Proof of insurance: A properly issued binder counts as a policy for proving that someone has coverage. A party to a contract who requires proof of insurance and refuses such a binder may be fined up to $500, and is liable for the actual damages it causes.
• The exception: That proof-of-insurance protection does not apply to a binder for coverage of at least $1,000,000. That includes exactly $1,000,000.
• What a lender may still do: A lender, seller, lessor or service provider may still disapprove of the insurer, or its representative, based on:
• the adequacy and terms of the coverage for that party's interest;
• the insurer's financial standards; or
• the ability to service the policy.

Licenses, appointments and renewals

Four terms are easy to mix up here. Each answers a different question.

• Producer license: the license the Commissioner issues to a person who has met the requirements for it. It answers: may this person sell insurance in the licensed lines?
• Agent: a producer compensated by the insurer who sells, solicits or negotiates insurance for that insurer. A producer may act as an insurer's agent only if the insurer has appointed them. The appointment is the insurer's filed notice making a licensed producer its agent. The insurer files it within 15 days after the contract is executed or the first application is submitted. An appointment does not replace a license. (The statute has one stated exception for a type of insurance this lesson does not cover.)
• Broker: a producer who is not acting as an insurer's agent and who works for the insured or prospective insured. A broker does not need an appointment and cannot, by their own actions, bind (commit) an insurer.

Continuing education (NAC 683A.330). To renew a license, the licensee must certify completion of 30 hours of approved continuing education within the 3-year period before renewal. Three of those hours must be in ethics. The hours must relate to the licensed lines. A licensee is exempt if they certify that they either: - hold and maintain a CPCU, CLU, CIC, CFP or ChFC designation; or - have 20 years of continuous experience in insurance with insurance as their primary source of income.

Renewal timing (NRS 683A.261). The renewal date for a license is the last day of the month three years after it was issued, or three years after it was last due for renewal.

• On time: renewal request, fees and education completed on or before the renewal date.
• Up to 30 days late: the producer may still renew by paying a penalty of 50% of the renewal fees (one listed fee is excluded from the penalty).
• No request received by day 30: the license expires.
• After expiry: a natural person (an individual, not a business) may reinstate the license within 12 months after the renewal date without retaking the exam. They must complete the applicable continuing education and pay a penalty of twice all applicable renewal fees, except any fee required under NRS 680C.110.
• Waiver: A producer who could not renew because of military service, extended medical disability or another extenuating circumstance may request a waiver of the time limit and penalties.

Note that reinstatement is a conditional option. It is not granted automatically.

Motor vehicle physical damage appraisers (NRS 684B.020). An appraiser in this sense is someone who, for a separate fee, appraises damage to motor vehicles as a business. Acting as one for an insurer, or for a business that adjusts or appraises motor vehicle claims, requires an appraiser license from the Commissioner. The exemptions are: - a licensed insurance adjuster; - an employee of an authorized insurer, motor club, motor vehicle dealer or body repair shop.

A producer license is not on that list. Acting without a required license can bring a fine of up to $1,000 per violation.

Honest comparisons and prompt repair payments

Twisting (NRS 686A.050) is making a written or oral statement that misrepresents a policy, or makes a misleading comparison of policies, in order to induce or try to induce someone to: - drop, surrender or replace a policy; - borrow against a policy; or - otherwise deal with or dispose of a policy.

The attempt alone is enough; the person does not have to switch. A comparison that is accurate and not misleading does not fit this description simply because the customer later switches policies. A related section, NRS 686A.030, prohibits misrepresenting a policy's benefits, terms or conditions in any statement, sales presentation or comparison.

Motor vehicle repair payments (NRS 686A.300). This applies to an insurer that covers damage to a motor vehicle. The insurer must not delay payment after it receives a statement of charges from a garage or licensed body shop that the insured previously authorized to do the repairs.

"Delay" means failing to issue a check or draft within 30 days after the insurer receives the statement, for repairs that were satisfactorily completed. The check may be payable to the shop alone, or jointly to the insured and the shop.

The clock starts when the insurer receives the statement. It does not start at the accident, and it does not start when the claim was filed.

Holding other people's premium money (fiduciary accounts)

A fiduciary account, also called a trust account, holds money a producer handles on behalf of others. NAC 683A.420 tests whether such an account has a deficit (a shortfall) by comparing two totals:

• Side 1: gross accounts receivable from insureds (premium amounts customers owe), minus uncollected commissions included in those receivables, plus all deposits in trust accounts. The Commissioner uses the average commission rate to figure the uncollected commissions.
• Side 2: net accounts payable to producers, plus all accounts receivable that are more than 90 days old.

If Side 2 is greater than Side 1, the account has a deficit.

Example: - Side 1: $15,000 − $3,000 + $2,000 = $14,000. - Side 2: $12,000 + $3,000 = $15,000. - Side 2 is larger by $1,000, so there is a $1,000 deficit.

Curing a deficit (NAC 683A.430). The person must cure it within 5 days after receiving the Commissioner's notice. Curing takes both of these steps: - depositing an amount equal to the deficit in the trust account; and - sending the Commissioner a written explanation.

A person who fails to cure is considered financially irresponsible.

When an insurer fails (Nevada Insurance Guaranty Association)

When an insurer becomes insolvent (it cannot meet its obligations), the Nevada Insurance Guaranty Association pays covered claims. A covered claim is an unpaid claim within the policy's coverage that also meets a Nevada connection. For example: - the claimant or insured, if a natural person, was a Nevada resident at the time of the insured event; or - the property behind a first-party property claim is permanently located in Nevada.

Two different tools limit what the Association pays. Keep them apart:

Payment ceilings (NRS 687A.060). These answer: at most, how much? - Workers' compensation claims: the entire amount. - Return of unearned premium (premium paid for coverage time that did not happen): no more than $10,000 per policy. - Any other covered claim: the lesser of the policy limit or $300,000 per occurrence. - The Association is also never obligated to pay more than the insolvent insurer owed under the policy.

Net-worth exclusions (NRS 687A.033). These answer: is this a covered claim at all? Both are measured on December 31 of the year before the insurer became insolvent: - A first-party claim (the insured claiming for its own loss) is excluded if the insured's net worth was over $10,000,000. - A third-party claim (a claim against the insured under its policy) is excluded if the insured's net worth was over $25,000,000.

Net worth includes the insured's subsidiaries and affiliates, combined. These exclusions do not apply to workers' compensation. The third-party exclusion also does not apply in listed bankruptcy and receivership situations.

Worked contrast. - A Nevada homeowner has a $90,000 covered claim under a policy with a $150,000 limit. Assume all other eligibility and timing requirements are met, and that there is no recovery from other insurance and no offset. The ceiling is the lesser of $150,000 and $300,000, which is $150,000. The claim is below that, so the Association pays $90,000. It does not pay $300,000; the $300,000 is a ceiling, not an amount owed. - A business with a $12,000,000 net worth makes a first-party property claim. It is excluded, because $12,000,000 is over $10,000,000. A third-party claim under the same business's policy would not be excluded by net worth, because $12,000,000 is under $25,000,000.

Asking the Commissioner for a hearing

Under NRS 679B.310, a person aggrieved by an act of the Commissioner, a failure to act, or a report, rule, regulation or order may apply in writing for a hearing. Two kinds of orders are not covered: an order to hold a hearing, and an order issued on a hearing the person had notice of.

Deadlines and steps: - Filing: The application must be filed within 60 days after the person knew, or reasonably should have known, of the matter. If another law sets a different period for that matter, the other law governs. - Content: The application must briefly state how the person is aggrieved and the grounds for relief. - Holding the hearing: If the Commissioner finds the application is in good faith and the grounds would justify a hearing, the Commissioner must hold it within 60 days after the filing, unless both sides agree to postpone it. - No hearing held: If the Commissioner fails to hold a required hearing, that counts as a denial of the relief sought. For appeal purposes, it is treated like a final order.

Timing of the decision after a hearing. Two provisions apply: - For a contested case, NRS 679B.310 sets a final order within 45 days after the hearing closes, unless a specific statute provides otherwise. NRS 679B.310 gives "contested case" the meaning used in NRS 233B.032; for how this fits into Commissioner hearings, see Nevada's Commissioner: authority, examinations and hearings. - NRS 679B.360 sets a 30-day period for an order on hearing, also subject to other periods stated in the insurance code.

Because two provisions address timing, identify which provision and which exception a question points to before giving a number.

Checkpoint: which kind of rule decides it?

For each statement, say whether it is decided by the policy's words, by Nevada law, or by a federal program rule.

1. A $1,000 deductible is subtracted from a covered loss.
2. One copy of a written binder must be delivered in person, or mailed first class, to the insured and to the insurer within 24 hours after the binder becomes effective.
3. A cargo policy covers only goods carried in three named states.
4. A trust-account deficit must be cured within 5 days after notice.
5. A policy says the insurer will give 45 days' notice before cancelling for a material change in risk.

Terrorism losses: the policy and the federal backstop

The Terrorism Risk Insurance Program is a temporary federal program. Under it, the federal government shares certain insured losses from a certified act of terrorism. A 2019 law extended the program through December 31, 2027.

The program has two separate layers. Do not mix them up:

• The policy layer. A policyholder's claim is paid under its own commercial property and casualty policy, subject to that policy's terms.
• The backstop layer. Treasury reimburses the insurer for part of the insurer's losses. Treasury does not pay the customer.

Neighboring terms to compare:

• Certification vs. news coverage. An "act of terrorism" for the program exists only when the Secretary of the Treasury certifies it, in consultation with the Attorney General and the Secretary of Homeland Security. A news report calling an event terrorism is not a certification.
• The $5,000,000 test vs. the $200,000,000 trigger. These measure different things.
• The Secretary may not certify an act if its total property and casualty insurance losses do not exceed $5,000,000. This count includes amounts payable under policies even where the policyholder declined terrorism coverage.
• Separately, federal compensation is not paid unless total industry insured losses from certified acts in a calendar year exceed $200,000,000 (the amount for 2020 and later years).
• Insurer deductible vs. policy deductible.
• An insurer deductible is 20% of the insurer's direct earned premiums from the previous year. It is the share of terrorism losses the insurer absorbs before federal sharing begins.
• A policy deductible is what an individual policyholder bears on its own claim.

Federal share. For 2020 and later years, the federal share is 80% of the insurer's insured losses above its insurer deductible. This is subject to adjustments and a $100 billion program cap. Payment also has conditions. Examples include: - the insurer offered the coverage and the insured accepted it before the act; - the loss falls within commercial property and casualty coverage as the regulation defines it; - required disclosures were made.

Worked case. Assume all of the following: - an act in 2026 is certified; - industry insured losses exceed $200,000,000; - every payment condition is met.

The insurer's insured losses are $50,000,000, and its insurer deductible is $30,000,000.

• Losses above the insurer deductible: $50,000,000 − $30,000,000 = $20,000,000.
• Federal share: 80% × $20,000,000 = $16,000,000, paid to the insurer.
• The insurer bears its $30,000,000 deductible plus the other 20% ($4,000,000), for a total of $34,000,000.

The 80% is not the share of a customer's claim that gets paid. Customers' claims are paid under their policies.

Change one fact: Total industry insured losses for the year are $150,000,000. The act is still certified; it passed the $5,000,000 test. But the $200,000,000 trigger is not exceeded, so no federal share is paid, even though the insurer's own losses are above its deductible.

Fuller treatment: Terrorism insurance: the policy and the federal backstop.

Diagnose your errors

A wrong answer tells you more when you can name why it was wrong. Each error type below matches one step of the routine and has a specific repair.

Worked diagnosis. A learner answers the $90,000 guaranty case with "$300,000."

• That is the ceiling-treated-as-payment error.
• Repair: write "lesser of $150,000 and $300,000 = $150,000." Then compare that ceiling with the actual claim of $90,000. The payment is the claim, because it is under the ceiling.

Checkpoint: name the error

Name the error type behind each wrong answer.

1. "The repair shop's statement arrived May 20, but the accident was April 2, so payment was due May 2."
2. "The insurer's insured losses above its deductible were $20,000,000, so the policyholder receives 80% of its claim."
3. "Policy C pays $28,500."

Mixed practice

Use the four questions. For each case, write the decision, the clause or section, and the deciding fact.

1. Policy E (invented) is a named-peril policy that covers fire, lightning and windstorm only. Tools worth $5,000 are stolen from the insured garage. What does Policy E pay?
2. A homeowners policy has been in effect for 240 days. The insurer discovers a material misrepresentation on the application and mails a cancellation notice on March 1. What is the earliest date the cancellation can take effect? What must the notice contain?
3. A producer's license renewal date is March 31. The renewal request reaches the Commissioner on May 15. What is the license status, and what option does the producer have if they are a natural person?
4. Using the fiduciary account formula, find whether this account has a deficit: - receivables from insureds: $20,000 - uncollected commissions in those receivables: $4,000 - trust deposits: $2,000 - net payables to producers: $15,000 - receivables over 90 days old: $2,000
5. Television commentators call a building attack in Nevada terrorism. The Secretary of the Treasury has not certified it. Can the insurer receive a federal share?
6. A licensed property producer, who is not an adjuster and not an insurer's employee, starts appraising car damage for insurers for a separate fee. What does Nevada law require?

Come back later: delayed review set

Wait at least one day before trying this set. Do it without notes. Afterward, match each miss to the error table and revisit the linked lesson for that error type. The examples are new on purpose: getting the same example right twice does not show that you can handle a new one.

1. Policy F (invented) has the same 80% coinsurance terms and order of calculation as Policy C, with a $500 deductible. The building is worth $200,000. The owner carries $120,000. The loss is $12,000. What does Policy F pay?
2. Assume every terrorism program condition is met and the trigger is exceeded. An insurer has $40,000,000 of insured losses and a $25,000,000 insurer deductible. What is the federal share, and who receives it?
3. A business policy expires June 30. The insurer mails a nonrenewal notice on May 15. The policyholder has not agreed to nonrenewal and has not accepted other coverage. The policy is not expressly designated nonrenewable by any clause the Commissioner approved or is deemed to have approved. What happens?
4. A producer shows a customer an accurate, not misleading side-by-side comparison of two homeowners policies. The customer switches. Is that twisting under NRS 686A.050?
5. A producer completed 30 hours of continuing education in property topics, none of them in ethics. They hold no exempting designation and do not meet the 20-year experience test. Do they meet the renewal education requirement?
6. A wholesaler insured with a $1,000,000 binder gives it to a landlord as proof of insurance. The landlord refuses it. Does the $500 fine provision apply?

What to remember

• Run the routine: what decides it, which clause, does every condition and exception fit, and which fact decided it.
• Read policies in order: promise, then exclusions, then amount. A limit is a ceiling on covered loss, not a coverage decision.
• Follow the stated arithmetic order exactly. Under the supplied coinsurance terms: compute the required amount, multiply the loss by carried ÷ required when short, subtract the deductible, never go below zero, never go above the limit.
• Policy concepts vs. law: policy concepts come from the policy's words. Nevada statutes and regulations set duties that can limit those words; for cancellation and nonrenewal, a policy may be more favorable than the statute.
• Watch the start of every clock: notice delivered or mailed, statement received, renewal date, application filed.
• Keep ceilings apart from eligibility: guaranty ceilings cap the payment; net-worth exclusions decide whether a claim is covered at all.
• Keep the terrorism program's layers apart: certification ($5,000,000 test), the industry trigger ($200,000,000), and the 80% federal share paid to the insurer.
• Name your errors, then retry each weak skill with new examples after a delay.