Ohio Property Study Guide

Do not study Ohio property law as a list of rules to add to what you already know. Study it as a set of departures — a few places where Ohio answers a familiar question differently, and two where the thing your national course assumes exists is simply not here. Ohio barely regulates the property form. What it regulates, in statute, is the settlement.

The valued policy law — the statute that overrides your loss-settlement answer

ORC 3929.25 inverts the answer national material teaches. On a total loss by fire or lightning, the whole amount stated in the policy must be paid — the figure the insurer took a premium on — not the actual cash value of what burned. Ask what a $200,000 dwelling policy pays on a total fire loss where the building was worth $160,000: the trained reflex is “actual cash value, up to the limit,” and in Ohio the answer is $200,000.

Two conditions switch the rule off, and stems hide them in the fact pattern: a change increasing the risk made without the insurers’ consent, and intentional fraud by the insured. Absent those, the stated amount is owed.

Three riders in the same section are individually testable.

The agent’s duty at issue. The agent must examine the building and fix its insurable value when the policy is written. That duty is why the rule is fair rather than arbitrary — the insurer had its chance to look.

The replacement-cost escape hatch. A policy that conditions replacement-cost settlement on actual repair or replacement is settled as the policy prescribes instead of under the valued policy rule. The statute reaches the claim the policy has not already conditioned.

Cellar and foundation walls. Not considered part of the building in settling losses, notwithstanding anything to the contrary in the application or the policy.

One more settlement rule is statutory here rather than contractual. Where two or more policies cover the same property, ORC 3929.26 makes contribution pro rata — each contributes to the whole or partial loss in proportion to the insurance it carries. Elsewhere you argue that from the “other insurance” condition. In Ohio you cite the code.

Two things Ohio does not have

Both of these are worth knowing affirmatively, because candidates trained elsewhere go looking for them and then answer from memory.

Ohio has no standard fire policy form. Chapter 3929 contains no standard-form statute at all; the form is the insurer’s. Ohio also mandates no appraisal clause — not a gap in your notes, but a verified absence, checked by reading the whole of Chapter 3929 rather than by failing to find it.

Together they give you the shape of the chapter: Ohio leaves the wording to the insurer and legislates the payout, in 3929.25 and 3929.26.

The FAIR Plan — two tests, and only one of them is in the statute

When the admitted market will not write the risk, Ohio’s answer is the Ohio FAIR Plan Underwriting Association, the property insurer of last resort — and the distinction the exam can exploit is where its two tests live. The statutory test at ORC 3929.43 is only that the risk be insurable under reasonable underwriting standards and that the applicant be unable to procure the coverage through normal channels. It sets no declination count. The count lives in the rule: OAC 3901-1-18(H)(1)(a) requires that at least two insurers authorized to do business in Ohio have declined the coverage requested. So does the limit — $2,000,000 per location for real and personal property, at OAC 3901-1-18(F)(1).

Statute for eligibility in principle, rule for the number and the cap.

Surplus lines — a property license is not enough

This is the item candidates habitually get half right. A resident surplus lines broker must hold both a property license and a casualty license — not a generic producer license (ORC 3905.30(B)), which is exactly why a property-only licensee cannot place surplus lines alone. Nonresidents need an active home-state surplus lines license.

Before the placement, diligent effort: contact at least five of the authorized insurers the agent represents that customarily write the kind of insurance required — or as many as the agent represents (ORC 3905.33(B)(1)). Two exceptions travel with it: purchasing groups and risk retention groups under Chapter 3960, and exempt commercial purchasers where the disclosure is made and a written request received (ORC 3905.33(B)(3), (B)(4); ORC 3905.331).