Property General
Not publishedof exam
Policy Types: 22Terms: 15Provisions: 13Property Forms
Property Illinois
Not publishedof exam
Common Rules: 22P&C Rules: 5Property Rules: 3Producer Licensing
Casualty General
Not publishedof exam
Policies + Bonds: 23Terms: 15Provisions: 12Liability Coverages
Casualty Illinois
Not publishedof exam
Common Rules: 22P&C Rules: 5Casualty Rules: 10Illinois Auto
Quick Facts
- Structure
- Four separate sections
- Property General
- 50 scored + 5 pretest
- Property State
- 30 scored + 5 pretest
- Casualty General
- 50 scored + 5 pretest
- Casualty State
- 37 scored + 5 pretest
- Passing
- Scaled 70 each section
- Pair Deadline
- Both passed within 90 days
- Exam Price
- $92 each examination
- Pair Discount
- $92 same-line same-order discount
- Prelicensing
- 20 hours per line
- Live Instruction
- 7.5 hours per line
- Provider
- Pearson VUE
Homeowners: ABCDEF
Dwelling, Other, Contents, Use, Liability, Medical
A: dwellingB: other structuresC: contentsD: loss useE: liabilityF: medical
Peril vs Hazard
Peril
- Causes loss
- Fire or wind
Hazard
- Raises loss chance
- Physical, moral, morale
Cause vs condition
Property Coverage Picker
- Owner-occupied home→Homeowners form
- Tenant contents→HO-4
- Condo unit owner→HO-6
- Older valued home→HO-8
- Nonowner dwelling→Dwelling form
- Business property package→CPP or BOP
- Property in transit→Inland marine
- Building under construction→Builders risk
- Flood exposure→NFIP policy
- Mechanical breakdown→Equipment breakdown
Risk and Insurance Basics
- Risk
- Uncertainty of loss
- Pure risk
- Loss or no loss
- Speculative risk
- Gain or loss possible
- Peril
- Direct cause of loss
- Hazard
- Increases loss probability
- Physical hazard
- Tangible dangerous condition
- Moral hazard
- Dishonesty increases loss
- Morale hazard
- Carelessness increases loss
- Adverse selection
- High risks seek coverage
- Law large numbers
- More exposure improves prediction
Named vs Open Perils
Named perils
- Listed causes covered
- Insured proves peril
Open perils
- All except exclusions
- Insurer proves exclusion
Listed vs not excluded
Contract and Policy Anatomy
- Declarations
- Who, what, limits, premium
- Insuring agreement
- Insurer coverage promise
- Conditions
- Duties and claim rules
- Exclusions
- Losses not covered
- Endorsement
- Changes policy terms
- Binder
- Temporary coverage evidence
- Representation
- Believed-true application statement
- Concealment
- Withholding material fact
- Warranty
- Guaranteed factual statement
- Subrogation
- Insurer pursues responsible party
- Insurable interest
- Financial stake in property
ACV vs Replacement Cost
ACV
- Subtract depreciation
- Lower claim payment
Replacement cost
- No depreciation
- Conditions may apply
Depreciated vs new cost
Property Loss Math
- Direct loss
- Immediate physical damage
- Indirect loss
- Consequential financial loss
- Proximate cause
- Dominant unbroken cause
- ACV
- Replacement cost minus depreciation
- Replacement cost
- Replace without depreciation
- Market value
- Buyer-seller price
- Agreed value
- Prearranged payable value
- Coinsurance
- Insurance-to-value requirement
- Coinsurance formula
- Carried ÷ required × loss
- Deductible
- Insured retains first dollars
- Indemnity
- Restore preloss position
Deductible vs Coinsurance
Deductible
- First-dollar retention
- Applied per loss
Coinsurance
- Insurance-to-value rule
- Underinsurance reduces payment
Retention vs valuation penalty
Dwelling and Homeowners Forms
- DP-1
- Basic named-peril form
- DP-2
- Broad named-peril form
- DP-3
- Open-peril dwelling form
- HO-2
- Broad named-peril form
- HO-3
- Open dwelling; named contents
- HO-4
- Renters contents and liability
- HO-5
- Open dwelling and contents
- HO-6
- Condominium unit-owner form
- HO-8
- Modified older-home coverage
- Coverage A
- Dwelling
- Coverage B
- Other structures
- Coverage C
- Personal property
- Coverage D
- Loss of use
- Coverage E
- Personal liability
- Coverage F
- Medical payments to others
Commercial Property
- CPP
- Modular commercial package
- BOP
- Property plus liability package
- Building coverage
- Structure and fixtures
- Business personal property
- Business contents
- Business income
- Income after suspension
- Extra expense
- Costs reducing suspension
- Builders risk
- Buildings under construction
- Inland marine
- Movable property and transit
- Equipment breakdown
- Mechanical electrical breakdown
- NFIP
- Federal flood insurance
- Ordinance or law
- Code-upgrade costs
- Cyber first-party
- Own data-loss costs
Exam Pair Rule
General plus State, same line, ninety days
Property pairCasualty pairScaled 70 each
Property General vs State
Property General
- National product knowledge
- 50 scored
- 85 minutes
Property State
- Illinois law
- 30 scored
- 50 minutes
Both required within 90 days
Illinois Licensing Path
- Need Property authority→Complete Property course(20 hours)
- Need Casualty authority→Complete Casualty course(20 hours)
- Want pair discount→Order same-line sections(Same order)
- Taking Property→General plus State
- Taking Casualty→General plus State
- Passed one section→Pass matching section(Within 90 days)
- Failed a section→Reschedule failed section
- Passed required sections→Wait five days
- Five days elapsed→Apply for license
Four-Section Exam Map
- Property General
- 50 scored; 85 minutes
- Property State
- 30 scored; 50 minutes
- Casualty General
- 50 scored; 80 minutes
- Casualty State
- 37 scored; 55 minutes
- Pretest
- Five unscored each section
- Passing
- Scaled score 70 each
- Pair window
- Same line within 90 days
- Same-order pair
- One $92 discount
- Separate orders
- $92 each examination
Illinois Producer Rules
- Minimum age
- 18 years
- Property course
- 20 hours minimum
- Casualty course
- 20 hours minimum
- Live requirement
- 7.5 hours each course
- Producer license
- Two-year term
- Continuing education
- 24 hours each renewal
- Ethics CE
- Three classroom or webinar hours
- Premium funds
- Fiduciary responsibility
- Misrepresentation
- Prohibited sales practice
- Rebating
- Prohibited inducement
- Controlled business
- Cannot dominate license purpose
- Guaranty Fund
- Admitted-insurer insolvency protection
Illinois Property Rules
- FAIR Plan
- Residual basic property market
- FAIR eligibility
- Standard market unavailable
- FAIR attempts
- Try three standard insurers
- Mine subsidence
- Underground-mine ground movement
- Mandatory counties
- 34 counties include coverage
- Coverage rejection
- Written rejection permitted
- Optional counties
- Coverage available by request
- Location rejection
- Statutory restrictions apply
- Cancellation
- Illinois notice rules apply
Negligence: DBCD
Duty, Breach, Causation, Damages
D: dutyB: breachC: causationD: damages
Occurrence vs Claims-Made
Occurrence
- Injury during policy
- Later claim possible
Claims-made
- Claim during policy
- Retroactive date matters
Injury date vs claim date
Casualty Coverage Picker
- Personal auto liability→PAP Part A
- Personal auto medical→PAP Part B
- Uninsured driver injury→PAP Part C
- Own auto collision→PAP Part D
- Business premises liability→CGL
- Professional service error→Professional liability
- Employee work injury→Workers compensation
- Employee dishonesty→Fidelity bond
- Contract performance guarantee→Surety bond
- Higher liability limits→Umbrella or excess
Liability Foundations
- Negligence
- Failure of reasonable care
- Duty
- Required standard of care
- Breach
- Duty not met
- Causation
- Breach produced injury
- Damages
- Measurable loss or injury
- Vicarious liability
- Liability for another
- Strict liability
- Fault proof unnecessary
- Compensatory damages
- Repay actual harm
- Punitive damages
- Punish egregious conduct
- Split limits
- Separate per-person totals
- Combined single limit
- One total liability limit
PAP: ABCD
Liability, Medical, UM, Damage
A: liabilityB: medicalC: uninsuredD: own auto
Fidelity vs Surety
Fidelity
- Employee dishonesty
- Employer protected
Surety
- Performance promise
- Obligee protected
Dishonesty vs performance
Personal Auto Policy
- Part A
- Liability coverage
- Part B
- Medical payments
- Part C
- Uninsured motorists
- Part D
- Damage to your auto
- Collision
- Vehicle impact or upset
- Other than collision
- Noncollision physical loss
- Temporary substitute
- Replaces unavailable covered auto
- Newly acquired auto
- Automatic coverage conditions apply
- Nonowned auto
- Used but not owned
- Transportation expense
- Temporary transport costs
Commercial Casualty
- CGL Coverage A
- Bodily injury, property damage
- CGL Coverage B
- Personal advertising injury
- CGL Coverage C
- Medical payments
- Premises operations
- Current location operations
- Products operations
- Products-caused injury
- Completed operations
- Finished-work injury
- Commercial auto
- Business vehicle exposures
- Umbrella
- Broad excess protection
- Professional liability
- Professional service errors
- EPLI
- Employment-practice claims
- Fidelity bond
- Protects employer from dishonesty
- Surety bond
- Guarantees principal performance
Workers Compensation
- Coverage Part One
- Statutory workers compensation
- Coverage Part Two
- Employers liability
- Medical benefits
- Work-injury medical care
- Disability benefits
- Work-injury wage replacement
- Death benefits
- Eligible survivor benefits
- Exclusive remedy
- Usually bars employer tort
- Experience rating
- Losses affect premium
- Other states
- Listed incidental exposures
Illinois Auto: 25-50-20
Person, crash, property
$25K one person$50K one crash$20K property damage
Casualty General vs State
Casualty General
- National product knowledge
- 50 scored
- 80 minutes
Casualty State
- Illinois law
- 37 scored
- 55 minutes
Both required within 90 days
Illinois Market Picker
- Standard property available→Voluntary insurer
- Property repeatedly declined→Illinois FAIR Plan
- Standard auto unavailable→ILAIP
- Unusual commercial risk→Surplus lines
- Admitted insurer insolvent→Guaranty Fund
- Mandatory mine county→Included mine coverage
- Optional mine county→Request mine coverage
- One Illinois employee→Check workers compensation
Illinois Casualty Rules
- Liability minimum
- 25/50/20
- $25,000
- Bodily injury per person
- $50,000
- Bodily injury per crash
- $20,000
- Property damage per crash
- UM bodily injury
- Minimum 25/50 required
- Additional UM
- Offered equal to BI limits
- UM rejection
- Only excess rejected in writing
- UIM trigger
- Required when UM exceeds minimum
- UIM amount
- Equals total UM coverage
- UMPD
- Must be made available
- UMPD deductible
- $250 maximum
- ILAIP
- Residual-market auto access
UM vs UIM
UM
- No liability insurance
- 25/50 minimum required
UIM
- Insufficient liability insurance
- Required above UM minimum
None vs not enough
Illinois Workers Compensation
- General rule
- Most employers require coverage
- One employee
- Coverage generally required
- Coverage start
- Begins upon hiring
- Funding
- Employer pays entire cost
- Insurance option
- Authorized workers comp carrier
- Alternative
- Approved self-insurance
- Workplace notice
- Employer must post
- Employee charge
- Premium shifting prohibited
FAIR Plan vs ILAIP
FAIR Plan
- Basic property coverage
- Standard market unavailable
ILAIP
- Automobile coverage access
- Standard market unavailable
Property residual vs auto residual
Common Traps
Exam structure
Four separate sections ≠ Not one combined exam
Passing score
Scaled score 70 ≠ Not 70 percent correct
Exam pricing
$92 each listed exam ≠ Pair discount requires same order
Pair deadline
Same-line sections within 90 days ≠ Not all four together
Pretest questions
Five per section ≠ Do not affect score
UM rejection
Minimum 25/50 remains ≠ Only additional UM rejectable
UIM requirement
Triggered above minimum UM ≠ Then equals total UM
Mine subsidence
Included in 34 counties ≠ Written rejection still permitted
FAIR Plan role
Residual basic property coverage ≠ Not guaranteed standard coverage
Workers compensation
Employer funds coverage ≠ Employee cannot fund premium
Last Minute
- 1.Four sections; four scaled scores
- 2.Property: 50 General; 30 State
- 3.Casualty: 50 General; 37 State
- 4.Pass matching sections within 90 days
- 5.Same-order line pair earns discount
- 6.Pretest questions never affect score
- 7.Peril causes; hazard increases chance
- 8.ACV equals replacement minus depreciation
- 9.Coinsurance: carried ÷ required × loss
- 10.PAP: liability, medical, UM, damage
- 11.CGL: BI/PD, advertising, medical
- 12.Negligence: duty, breach, causation, damages
- 13.Illinois liability minimum: 25/50/20
- 14.UM minimum: 25/50 bodily injury
- 15.UIM required above minimum UM
- 16.FAIR means residual property market
- 17.ILAIP means residual auto market
- 18.Most Illinois employers need coverage
- 19.CE: 24 hours; ethics: three
- 20.Wait five days before applying
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