North Dakota Personal Lines Study Guide

Personal Lines sits across two statutory chapters that were written separately and never harmonised. Automobile is NDCC ch. 26.1-40. Fire and property is NDCC ch. 26.1-39. They use different notice periods for the same events, and telling them apart is most of what the state portion of this exam wants from you.

Six notice periods, and only one of them matches

Event	Personal auto	Homeowners and fire
Cancellation — nonpayment	10 days	10 days
Cancellation — other permitted reason	20 days	30 days
Nonrenewal	30 days	45 days
Specified hazardous conditions	—	5 days

Ten days for nonpayment is the only figure the two chapters share. Property nonrenewal stretches further still — 90 days for professional liability — giving North Dakota three different nonrenewal periods.

The 60-day freeze on auto

Once a personal auto policy has been in effect 60 days — or immediately, if it is a renewal — the insurer may cancel only on the grounds enumerated at NDCC 26.1-40-02(1): nonpayment; suspension of a licence or registration; fraud or material misrepresentation; a vehicle defect or use that substantially increases the risk; the insured moving out of state; unpaid prerequisite dues; or a determination by the commissioner.

The renewal clause is the part people read past. A policy in its second term has no free window at all — the enumerated grounds apply from day one of that term, no matter how few days in you are.

The prohibited grounds — and the one that gets tested

NDCC 26.1-40-11 lists six numbered grounds an insurer may not rely on in declining, cancelling or refusing to renew: race, religion, nationality or ethnic group; lawful occupation; location absent a legitimate business purpose; age, sex or marital status standing alone; the applicant having previously obtained coverage through a residual market mechanism or a substandard-risk insurer; and the mere fact that another insurer declined, cancelled or refused to renew.

Most of that reads like any unfair-discrimination provision. The two that get tested are the last pair, and the fifth is the one most often missing from summaries — having been in the residual market before is not a permissible reason to turn someone away now.

The reason is not always volunteered. Only a nonpayment cancellation notice must carry it. For any other cancellation, and for nonrenewal, the insurer may instead say it will supply the reason on written request made at least 10 days before the effective date (26.1-40-04; 26.1-40-05), and the property chapter matches at 26.1-39-16(2).

The auto policy you are actually selling

North Dakota is a no-fault state and coverage is compulsory — the owner of a registered vehicle must continuously provide security for basic no-fault benefits, and the registration is what gets suspended if they do not.

What that policy contains:

• Basic no-fault benefits of $30,000 per person per accident for economic loss, with work loss capped at $150 per week, funeral at $3,500, and replacement services at $15 per day — all sublimits inside the $30,000, not added to it.
• Liability minimums of 25/50/25, found at NDCC 39-16.1-11(2)(b) in Title 39 rather than in the insurance title.
• Uninsured motorist coverage, mandatory, and underinsured motorist coverage, also mandatory, at limits equal to the UM limits (26.1-40-15.2; -15.3).
• No stacking. UM and UIM limits “may not be added to or stacked upon limits for such coverages applying to other motor vehicles” (26.1-40-15.4(2)). Three cars on one policy does not mean three times the limit.

Suing the other driver for pain and suffering requires clearing the serious injury threshold: death, dismemberment, serious and permanent disfigurement, disability beyond 60 days, or medical expenses over $2,500.

The homeowners side — and the rule that changes your advice

North Dakota is a valued policy state. Where insured real property is wholly destroyed by a covered cause of loss without fraud, “the amount of the insurance written in the policy is the true value of the property insured and the true amount of loss and measure of damages” (NDCC 26.1-39-05(1)), and the standard policy is expressly a valued policy (26.1-39-08).

On a qualifying total loss the limit is the settlement — which makes the limit your client chooses the whole conversation, because nothing downstream corrects an under-insured dwelling.

Three carve-outs keep this narrower than it sounds, and a personal lines producer meets all three:

• a total loss within 60 days of the effective date, or within 60 days of a 25%-or-greater limit increase at the insured’s request, pays the lesser of the policy value or what a partial loss would have paid;
• the section does not apply to personal property — Coverage C is settled the ordinary way;
• it does not apply to an appurtenant or separate structure, which “must be settled for actual replacement cost or actual cash value.”

So the house may pay at the limit while the detached garage and the contents do not. And a partial loss is an ordinary settlement throughout.

One more borrowed-form trap

North Dakota’s fire policy terms come from the 1943 New York standard fire policy, adopted by reference at NDCC 26.1-39-06 — so the appraisal clause is New York’s language rather than North Dakota’s. Proof of loss is not: NDCC 26.1-32-08 gives the insured 60 days after the insurer furnishes the blank form, obliges the insurer to furnish it within 20 days of notice, and waives the proof requirement entirely if it does not.

But the deadline to sue is not. The New York form says 24 months; NDCC 26.1-39-06(10) voids any limitation shorter than three years. Learn the form and you will get that one wrong.