Free Illinois Property & Casualty Exam Flashcards

Subject to exclusions and conditions, an HO-3 generally covers the dwelling and other structures on an open-perils basis, while personal property is covered for named perils. The cause of loss therefore matters differently by coverage part.

HO-4 is designed for tenants and primarily covers personal property and liability, not the building. HO-6 is designed for condominium unit owners and can cover personal property plus building items for which the unit owner is responsible.

A dwelling policy primarily insures residential property and may not automatically include the broad personal liability and personal-property package found in homeowners forms. Coverage depends on the selected dwelling form and endorsements.

It can insure the described building and the insured business's covered personal property at the premises. Property of others may have limited coverage, so ownership, location, limits, and valuation must be checked separately.

A BOP packages property and liability coverages for eligible small or medium-sized businesses. It is not automatically suitable for every operation; eligibility, classifications, limits, and optional coverages still matter.

It commonly covers movable property, property in transit, or specialized property that does not fit a fixed-location form. A floater follows covered property more broadly than ordinary premises-based coverage, subject to its territory and exclusions.

Standard homeowners policies generally exclude flood. Eligible building and contents flood coverage is written through a separate flood policy, so water source and policy definitions determine whether a loss belongs under flood or another coverage.

A peril is a direct cause of loss, such as fire. A hazard is a condition that increases the chance or severity of loss; hazards may be physical, moral, or morale. The hazard influences risk, while the peril produces the loss.

A direct loss is immediate physical damage caused by a covered peril. An indirect or consequential loss results from that damage, such as lost business income while damaged premises are unusable, and usually requires its own coverage.

Replacement cost measures the cost to repair or replace without deducting depreciation, subject to policy terms. Actual cash value generally reflects depreciation or another policy-defined valuation method, so it may produce a smaller settlement.

It encourages insurance to a stated percentage of the property's value. If the carried limit is below the amount required at the time of loss, the insured may share a partial-loss payment through a coinsurance penalty.

The declarations identify the insured, property, limits, dates, and selected coverages. The insuring agreement states the insurer's basic coverage promise. Both must be read with definitions, conditions, and exclusions.

A condition states duties or rules that govern coverage, such as notice after loss. An exclusion removes specified causes, property, persons, or situations from coverage. Failing a condition may affect recovery even when no exclusion applies.

A standard mortgage clause gives the named mortgagee a separate interest, subject to its own duties. The mortgagee may preserve coverage by paying due premium, notifying known ownership changes, and submitting proof of loss when required.

Appraisal addresses disagreement about the amount of a covered property loss, not whether coverage exists. Each side selects an appraiser, and an umpire may resolve differences; coverage disputes remain outside appraisal.

A person who sells, solicits, or negotiates insurance in Illinois generally must hold the appropriate producer authority unless a statutory exemption applies. Clerical work alone does not authorize unlicensed sales advice.

The applicant generally must be licensed and in good standing in the home state, submit the proper application and fees, and come from a state that licenses Illinois nonresidents on the same basis, absent a ground for denial.

Illinois requires at least 24 hours before renewal. Three of those hours must be classroom or webinar ethics instruction. The producer should complete CE early enough for the provider to report it before the renewal deadline.

Money received in connection with placing or maintaining insurance is held in a fiduciary capacity. It must not be misappropriated, converted, or improperly withheld; treating premium as personal operating money violates that duty.

Offering premium, commission, a special advantage, or another thing of value to induce insurance is prohibited when the benefit is not specified in the policy and no statutory exception applies. The rule applies to indirect as well as direct rebates.

Misrepresentation gives false or misleading information about a policy, insurer, or benefits. Defamation uses a false or malicious statement calculated to injure an insurance company's reputation or business. Both are prohibited marketing practices.

Materially false application information, insurance-law violations, fraud, misappropriating funds, misrepresenting policy terms, dishonest practices, or accepting business from an unlicensed person are among the statutory grounds for discipline.

Cancellation ends a policy before its stated expiration. Nonrenewal allows the policy to expire but declines a new term. Illinois notice, timing, and permissible-reason rules vary by policy type and circumstance, so do not treat the terms as interchangeable.

It is a residual-market mechanism intended to make basic property and homeowners insurance reasonably available to eligible applicants who cannot obtain it through ordinary methods. It is not a guarantee of every desired coverage or limit.

Coverage A addresses bodily injury and property damage liability; Coverage B addresses personal and advertising injury; Coverage C provides limited medical payments without requiring fault. Each has separate triggers and exclusions.

Occurrence coverage is generally triggered by injury or damage occurring during the policy period, even if the claim arrives later. Claims-made coverage focuses on when the claim is made and may also depend on a retroactive date and reporting period.

Liability responds to covered injury or damage the insured causes others. Medical payments covers eligible medical expenses without regard to fault. Collision and other-than-collision address covered damage to the insured vehicle.

Collision covers upset or impact with another vehicle or object. Other-than-collision covers listed noncollision causes such as theft, hail, flood, vandalism, fire, or contact with an animal, subject to the policy.

Workers' compensation pays statutory benefits for covered work injuries without requiring employee proof of employer negligence. Employers liability covers certain employer-liability claims arising from employee injury that fall outside the workers' compensation benefits grant.

A fidelity bond protects an employer or business against specified dishonest acts by covered persons. A surety bond is a three-party promise that the principal will perform an obligation to the obligee, backed by the surety.

Both add limits above underlying insurance. Excess coverage may simply follow one underlying form, while an umbrella may cover several underlying policies and sometimes broader exposures, subject to retention, exclusions, and its own terms.

The claimant must generally show a duty, breach of that duty, causation, and damages. A careless act alone is not enough if it caused no legally recognized injury or loss.

Vicarious liability makes one party responsible for another's conduct because of their relationship, such as some employer-employee situations. Strict liability can impose responsibility without proof of negligence for specified activities or products.

Compensatory damages aim to repay an injured party for loss and may include special and general damages. Punitive damages aim to punish and deter especially wrongful conduct and may be restricted or excluded by law or policy.

Split limits set separate maximums, typically per person bodily injury, per accident bodily injury, and per accident property damage. A combined single limit provides one maximum shared across covered bodily injury and property damage for the accident.

The insured may need to give prompt notice, cooperate, protect damaged property, send legal papers, and provide requested records. Failure to perform a material duty can prejudice the insurer and affect coverage.

They are specified claim-related expenses the insurer pays in addition to liability damages, such as defense costs, certain bonds, interest, or reasonable expenses incurred at the insurer's request, subject to the form's terms.

It determines whether and how the insurer may settle a covered claim without the insured's consent. Refusing a recommended settlement can shift later costs to the insured when a hammer clause applies.

It coordinates payment when more than one policy covers the same loss. Depending on the forms, coverage may apply as primary, excess, or share proportionally; the clauses must be compared rather than assumed to cancel each other.

The entity must hold a producer license and designate a licensed producer responsible for its compliance with Illinois insurance law. The entity license does not let unlicensed individuals sell, solicit, or negotiate insurance.

A producer placing insurance with an insurer with which the producer has no agency contract must maintain the required bond. IDOI states the amount is $2,500 or 5% of the prior year's brokered premiums, whichever is greater, capped at $50,000.

Not when that person was required to be licensed for selling, soliciting, or negotiating the insurance and was unlicensed at the time. Renewal commissions may continue if the person was properly licensed when the original activity occurred.

Insurers must investigate and handle claims fairly and promptly rather than misstate coverage, ignore communications, or use settlement conduct designed to disadvantage claimants. A producer should document facts and never promise an unsupported outcome.

It provides a mechanism for paying certain covered claims when a member insurer is placed into liquidation, reducing delay and financial loss. It is limited by statute and should never be used as a sales reason to ignore an insurer's financial condition.

The producer must inform the Director by an acceptable method within 30 days after the change. Keeping licensing contact information current also helps prevent missed renewal and compliance notices.

For statutory grounds, the Director may place a license on probation, suspend or revoke it, refuse issuance or renewal, levy a civil penalty, or combine remedies after the required process.

It may constitute insurance fraud and can trigger investigation, claim consequences, and civil or criminal action. Producers should preserve records, avoid coaching facts, and use the insurer's reporting process for suspected fraud.

$25,000 is the minimum bodily injury limit for one person, $50,000 is the bodily injury limit for two or more people in one crash, and $20,000 is the property-damage limit for one crash.

Bodily-injury UM coverage must be at least the statutory minimum. The policy must include UM equal to its bodily-injury liability limits unless the insured makes a written request for lower UM limits or rejects limits above the minimum in writing. When UM exceeds the statutory minimum, UIM must be included at the same limit as UM.

They provide regulated access for eligible applicants unable to obtain coverage through ordinary methods. The Illinois Automobile Insurance Plan addresses auto risks, while the Workers' Compensation Assigned Risk Pool addresses eligible employers needing workers' compensation coverage.