Study guide
1.4 Policy Structure: Declarations, Insuring Agreement, Conditions, Exclusions
Arkansas Property & Casualty Insurance State
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1 Standalone Coverage Map
Standalone Coverage Map
2 Introduction: Arkansas Property & Casualty Insurance Exam Overview
Arkansas Property & Casualty Exam Overview
3 National Portion: Insurance Fundamentals
1.1 Risk, Hazards, Perils, and the Law of Large Numbers 1.2 Insurable Interest, Indemnity, and Other Insurance Principles 1.3 Insurance Contract Law and Elements 1.4 Policy Structure: Declarations, Insuring Agreement, Conditions, Exclusions 1.5 Parties, Agents vs. Brokers, and Authority
4 National Portion: Property Insurance Concepts
2.1 Causes of Loss / Named-Peril vs. Open-Peril 2.2 Valuation: ACV, Replacement Cost, and Functional Value 2.3 Coinsurance and the Coinsurance Formula 2.4 Deductibles, Limits, and Loss Settlement 2.5 Common Property Policy Conditions and Clauses
5 National Portion: Dwelling Policies (DP)
3.1 Dwelling Policy Forms DP-1, DP-2, DP-3 3.2 Dwelling Coverages A-E and Other Coverages 3.3 Dwelling Perils, Conditions, and Endorsements 3.4 Mobile Home and Specialized Dwelling Coverage
6 National Portion: Homeowners Policies - Forms & Section I
4.1 Homeowners Forms HO-2 through HO-8 and Eligibility 4.2 Section I Coverages A-D and Additional Coverages 4.3 Section I Perils Insured Against and Exclusions 4.4 Replacement Cost vs. ACV and Loss Settlement in Homeowners
7 National Portion: Homeowners Policies - Section II & Endorsements
5.1 Section II Coverages E (Liability) and F (Medical Payments) 5.2 Homeowners Conditions and Duties After Loss 5.3 Common Homeowners Endorsements (scheduled property, water backup, ordinance or law)
8 National Portion: Personal Auto Policy - Liability & Injury
6.1 Personal Auto Policy Structure and Eligibility 6.2 Part A Liability and Supplementary Payments 6.3 Part B Medical Payments 6.4 Part C Uninsured/Underinsured Motorists
9 National Portion: Personal Auto Policy - Physical Damage & Duties
7.1 Part D: Coverage for Damage to Your Auto 7.2 Exclusions and Part E: Duties After an Accident 7.3 Part F: General Provisions, Endorsements, and No-Fault Concepts
10 National Portion: Liability Insurance Concepts
8.1 Negligence, Torts, and Legal Liability 8.2 Defenses, Damages, and Vicarious Liability 8.3 Occurrence vs. Claims-Made Triggers 8.4 Bodily Injury, Property Damage, and Personal/Advertising Injury
11 National Portion: Commercial Property Insurance
9.1 Commercial Package Policy Structure and Common Policy Conditions 9.2 Building and Personal Property Coverage Form (BPP) 9.3 Causes of Loss Forms (Basic, Broad, Special) 9.4 Business Income and Extra Expense 9.5 Commercial Property Endorsements and the BOP
12 National Portion: Commercial General Liability - Coverages
10.1 CGL Coverage A: Bodily Injury and Property Damage Liability 10.2 CGL Coverage B: Personal and Advertising Injury, Coverage C: Medical Payments 10.3 Who Is an Insured and Supplementary Payments
13 National Portion: Commercial General Liability - Limits, Triggers & Exclusions
11.1 CGL Limits of Insurance and Aggregates 11.2 Occurrence vs. Claims-Made CGL and Retroactive Dates 11.3 Key CGL Exclusions and Endorsements
14 National Portion: Commercial Auto Insurance
12.1 Business Auto Coverage Form and Covered Auto Symbols 12.2 Commercial Auto Liability and Physical Damage 12.3 Motor Carrier / Trucking and MCS-90 12.4 Garage Coverage Form and Garagekeepers 12.5 Commercial Auto Endorsements
15 National Portion: Workers Compensation
13.1 Workers Compensation Statutory Background and Benefits 13.2 Part One (Workers Comp) and Part Two (Employers Liability) 13.3 Premium Basis, Experience Modification, and Classification 13.4 Other States, USL&H, and Federal Acts 13.5 Workers Comp Exclusions and Endorsements
16 National Portion: Other Commercial Lines - BOP, Crime & Marine
14.1 Businessowners Policy (BOP) in Depth 14.2 Crime and Fidelity Coverage 14.3 Inland Marine and Nationwide Marine Definition 14.4 Ocean Marine Coverages (Hull, Cargo, Freight, P&I)
17 National Portion: Other Commercial Lines - Specialty & Professional
15.1 Farm and Agricultural Coverage 15.2 Commercial Umbrella and Excess Liability 15.3 Professional Liability and Errors & Omissions 15.4 Directors & Officers and Employment Practices Liability
18 National Portion: Other Commercial Lines - Surety, Flood & Specialty
16.1 Surety and Fidelity Bonds 16.2 National Flood Insurance Program (NFIP) 16.3 Cyber, Aviation, and Other Specialty Lines
19 National Portion: Insurance Regulation & Market Conduct
17.1 State Regulation, Licensing, and the McCarran-Ferguson Act 17.2 Rates, Forms, Solvency, and Guaranty Associations 17.3 Producer Authority, Fiduciary Duty, and Company Operations
20 National Portion: Ethics & Unfair Trade Practices
18.1 Unfair Trade Practices and Unfair Claims Settlement 18.2 Producer Ethics, Errors & Omissions Exposure, and Fiduciary Conduct 18.3 Privacy, Fraud, and Consumer Protection
21 Chapter 1: Arkansas P&C Insurance Regulation & Licensing
1.1 Arkansas Insurance Department 1.2 Arkansas P&C Producer Licensing Requirements 1.3 Arkansas Producer Responsibilities
22 Chapter 2: Arkansas Property Insurance
2.1 Arkansas Homeowners Insurance 2.2 Arkansas Commercial Property Insurance
23 Chapter 3: Arkansas Casualty & Auto Insurance
3.1 Arkansas Auto Insurance Requirements 3.2 Arkansas Liability Insurance 3.3 Arkansas Workers' Compensation Insurance
24 Chapter 4: Arkansas Ethics & Professional Conduct
4.1 Ethical Practices and Consumer Protection
1.4 Policy Structure: Declarations, Insuring Agreement, Conditions, Exclusions
Key Takeaways Explain This Topic AI
Every policy has four parts: Declarations (the who/what/how-much), Insuring Agreement (the promise to pay), Conditions (the rules of the deal), and Exclusions (what is not covered)
Use the mnemonic DICE — Declarations, Insuring agreement, Conditions, Exclusions
Named-perils forms cover only listed perils (burden on insured to prove); open-perils/special forms cover all perils except those excluded (burden on insurer)
Endorsements amend the base form; when an endorsement conflicts with the policy, the endorsement controls
Common exclusions exist to avoid catastrophic, non-fortuitous, or duplicate coverage: war, nuclear, intentional acts, wear and tear, flood, and earth movement
Last updated: June 2026
The DICE Framework
Every property and casualty policy, regardless of line, is built from four parts. Remember DICE :
Part What it contains Exam cue words
D — Declarations Named insured, address, policy period, limits, deductibles, premium, covered property/forms "Who, what, how much" — the front page
I — Insuring Agreement The insurer's core promise to pay for covered losses "We will pay..."
C — Conditions The rules both parties must follow (duties after loss, cancellation, subrogation, appraisal) "Duties," "in the event of loss"
E — Exclusions Perils, property, and losses not covered "We do not cover," "this policy does not apply to"
Quick Answer: Declarations identify the deal, the Insuring Agreement makes the promise, Conditions set the rules, and Exclusions carve out what is not covered.
Named Perils vs. Open Perils
How the Insuring Agreement grants coverage drives where the burden of proof falls — a heavily tested point.
Coverage trigger How it works Burden of proof Example forms
Named (specified) perils Covers only the perils explicitly listed On the insured to show the loss was caused by a listed peril DP-1, HO-2, basic CGL
Open perils ("special"/all-risk) Covers all direct physical loss except what is excluded On the insurer to prove an exclusion applies HO-3 dwelling, HO-5, DP-3
The Broad Form named perils familiar from HO-2 and DP-2 are remembered with the mnemonic WCSHAVVFRRR : Windstorm/hail, Civil commotion/riot, Smoke, Hail, Aircraft, Vehicles, Vandalism, Fire/lightning, Riot, plus the broad-form additions (falling objects, weight of ice/snow, accidental discharge, freezing, artificially generated current). Open-perils forms simply flip the logic — everything is covered unless the Exclusions section removes it.
Conditions, Endorsements, and the Common Exclusions
Conditions are the operating rules. Watch for these recurring ones:
Duties after loss — prompt notice, protect property from further damage, file sworn proof of loss, cooperate.
Appraisal — either party may demand it to resolve a valuation dispute (not a coverage dispute); each side picks an appraiser, who select an umpire.
Cancellation/Nonrenewal — notice periods set by state law.
Assignment — the policy cannot be transferred without insurer consent.
Mortgage clause — protects the lender's interest separately from the insured's.
Endorsements (riders) add, delete, or modify coverage. The rule: when an endorsement conflicts with the base policy, the endorsement controls because it is the more recent, specific expression of intent.
Why Exclusions Exist
Exclusions are not arbitrary; each serves a purpose the exam expects you to recognize:
- Common exclusion Reason
- War, nuclear hazard Catastrophic — uninsurable in a pool
- Flood, earth movement Catastrophic; covered by separate policies (NFIP, DIC)
- Intentional acts Loss is not fortuitous (accidental)
- Wear, tear, deterioration Maintenance , not a sudden accidental loss
- Ordinance or law Avoids extra-contractual code-upgrade cost (can be bought back)
- Business/auto liability in HO Avoids duplicate coverage handled by other policies
Many exclusions can be restored with an endorsement and added premium — for example, an Ordinance or Law endorsement or earthquake endorsement . The order of priority in a coverage dispute is: read the Declarations, confirm the Insuring Agreement grants coverage, apply any Exclusions, then check whether a Condition or Endorsement modifies the result.
The Declarations Page in Detail
The Declarations (dec) page is the first place an examiner expects you to look, because it personalizes the standardized form to one insured. A typical P&C dec page lists:
Named insured(s) and mailing address, and the policy number .
Policy period — the inception and expiration dates and times (coverage runs 12:01 a.m. standard time at the insured's address in most ISO forms).
Limits of insurance for each coverage (e.g., Coverage A dwelling $300,000).
Deductibles , including any separate wind/hail or hurricane percentage deductible.
Forms and endorsements attached, by edition date.
Rating information and premium , plus the mortgagee/loss payee .
Quick Answer: If a question asks where to find the policy limit, deductible, or which endorsements apply, the answer is the Declarations page.
Conditions That Control Claim Outcomes
Beyond the duties already listed, three conditions decide many claim scenarios:
- Condition What it does
- Loss settlement Sets ACV vs. replacement-cost basis and any coinsurance
Appraisal Resolves amount disputes; each party names an appraiser and the two pick an umpire — agreement by any two binds the amount, not coverage
Salvage and abandonment The insured may not abandon damaged property to the insurer; the insurer keeps salvage rights after paying
Pair clause vs. set clause is a frequent property wrinkle: if one item of a pair or set (a single earring, one dining chair) is lost, the insurer may pay the difference between the ACV of the whole set and the ACV of the remaining pieces, or restore the set — it does not simply pay for a total loss of the set.
Putting DICE to Work on a Question
When a scenario stumps you, walk DICE in order: confirm the loss falls within the Declarations (right insured, in force, adequate limit); verify the Insuring Agreement promises to pay for this type of loss; scan the Exclusions for a carve-out; then apply any Conditions or endorsements that expand or restrict the result. This disciplined sequence converts vague coverage questions into a checklist and is the single most reliable test-taking habit for the property sections.