Pennsylvania Property & Casualty Law

Correct

The answer is A: Residential and commercial property at a fixed location, including buildings and contents.

The Pennsylvania FAIR Plan (Fair Plan Act, 40 P.S. § 1600.101 et seq.) provides basic property insurance (the perils of the standard fire policy and extended coverage, plus vandalism and malicious mischief) on real and tangible personal property at a fixed location, both residential and commercial, for eligible risks that cannot obtain that coverage in the normal insurance market. It excludes motor vehicle and farm insurance, so it is not limited to owner-occupied dwellings, to commercial and industrial buildings, or to personal property alone.

Source: Insurance Code §1600.101

Correct

The answer is A: A personal residence the voluntary market declined to insure due to its high-crime location.

The Pennsylvania FAIR Plan (Fair Plan Act, 40 P.S. § 1600.101 et seq.) provides basic property insurance to insurable property at a fixed location in Pennsylvania that cannot get it in the normal market, and the Act sets no number of declinations. A residence the voluntary market turned down because of its high-crime location qualifies: the Act bars the facility from considering environmental hazards beyond the owner's control when it decides whether property is insurable. Farm property is outside the Plan, and the Plan's rules make ineligible a building under a government order to vacate as unsafe and one vacant more than a year with no renovation or sale planned.

Source: Insurance Code §1600.101

Correct

The answer is C: It must give the named insured 60 days' written notice stating specific reasons.

Under Article XX of the Insurance Company Law (40 P.S. § 991.2001 et seq.), a nonrenewal is not effective unless written notice is mailed or delivered to the named insured at least 60 days before the effective date. The notice must state the specific reasons and tell the insured of the right to ask the Insurance Commissioner to review the nonrenewal within 30 days. A shorter 15-day period applies only when the reason is nonpayment or a license or registration suspension. An auto policy does not renew by silence in a way that excuses notice, notice to a lienholder alone does not satisfy the statute, and the duty is not limited to driving-record nonrenewals.

Source: Insurance Code §991.2001

Correct

The answer is B: The property must be insurable but unable to get basic coverage in the normal market.

Under the Pennsylvania Fair Plan Act (40 P.S. § 1600.101 et seq.), the Plan exists so that property is not denied basic property insurance through the normal market without an inspection and fair evaluation. The Plan places insurable property that cannot obtain basic property insurance in the normal market. A claims-free record, a newer building and nonprofit status are not eligibility requirements; the Plan's disqualifiers are things like an arson or insurance fraud conviction, a misrepresentation on the application, or property that is not insurable.

Source: Insurance Code §1600.101