IL Property & Casualty flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Illinois producer continuing education

Illinois licensed producers must complete 24 hours of continuing education every two years, including at least 3 hours of ethics instruction, before biennial renewal.

Rebating

Giving any part of a premium or commission to an insured as an inducement to buy insurance; prohibited as an unfair trade practice in Illinois and most states.

Fiduciary duty of producer

A producer who handles premiums holds them in a trust capacity, must keep them separate from personal funds, and may not commingle or misappropriate them.

Unfair claim settlement practices

Acts such as misrepresenting policy provisions, failing to respond promptly, or offering far less than owed; when done with frequency they violate state unfair trade practice laws.

Principle of indemnity

Insurance restores the insured to approximately the same financial position held before a loss, never better; it prevents profit from loss and supports actual cash value settlements.

Insurable interest

A financial stake in the person or property insured such that a loss causes genuine economic harm; required at policy inception for life and at time of loss for property.

Contract of adhesion

A contract drafted by the insurer and presented to the insured on a take-it-or-leave-it basis; ambiguities are construed against the party that wrote it.

Subrogation

After paying a loss, the insurer acquires the insured's right to recover from the responsible third party, preventing double recovery and helping hold down premiums.

Coinsurance clause

A property provision requiring the insured to carry a stated percentage of the property's value; otherwise a proportional penalty reduces each loss payment.

Actual cash value

Replacement cost of damaged property minus depreciation, commonly used to settle losses so the insured bears the cost of age and wear.

Named peril versus open peril

Named-peril policies pay only for listed causes of loss; open-peril (special) forms pay for all risks except those specifically excluded.

Business income coverage

Pays the insured's lost net income plus continuing normal operating expenses during the period needed to restore operations after a covered property loss.

Negligence elements

To recover in negligence a claimant must prove duty owed, breach of that duty, proximate cause, and actual damages; all four elements are required.

Comparative negligence

A system that reduces a claimant's recovery by his or her percentage of fault; some states bar recovery when the claimant's fault exceeds a set threshold.

Vicarious liability

Legal responsibility imposed on one party for the negligent acts of another, such as an employer's liability for an employee acting within the scope of employment.

Umbrella versus excess policy

An umbrella adds a broad layer of liability above underlying policies and may drop down for gaps; a following-form excess policy only sits above specified underlying coverage.

HO-3 special form

Homeowners form covering the dwelling and other structures on an open-peril basis while personal property is covered for named perils only; the most common homeowner form.

HO-4 tenants form

Homeowners form for renters; covers personal property and loss of use, plus personal liability, but does not insure the building itself.

Coverage D loss of use

Pays additional living expenses and fair rental value when a covered loss makes the residence uninhabitable, typically up to 30 percent of Coverage A.

HO-6 condominium form

Form for condo unit owners covering personal property, building items within the unit, loss assessment, loss of use, and personal liability.

Illinois financial responsibility limits

Illinois drivers must carry at least $25,000 per person and $50,000 per accident bodily injury liability plus $20,000 property damage liability.

Uninsured motorist coverage

Pays the insured for bodily injury caused by a hit-and-run or uninsured driver; Illinois requires it at limits equal to the policy's bodily injury liability limits.

Other than collision coverage

Physical damage coverage for theft, fire, vandalism, glass breakage, weather, and animal strikes, subject to a deductible and distinct from collision coverage.

Newly acquired auto

Under the personal auto policy, a newly acquired vehicle receives automatic coverage for 14 days if the insured already carries physical damage coverage on other autos.

CGL Coverage A

CGL Coverage A pays damages the insured is legally obligated to pay for bodily injury or property damage caused by an occurrence in covered territory.

Claims-made liability policy

Responds to claims first made during the policy period, subject to a retroactive date; an extended reporting period can be purchased to cover later-reported claims.

Businessowners policy

A package policy for eligible small businesses combining commercial property, business income, and general liability at a simplified, often lower cost.

Surety bond parties

Three parties: the principal who performs the obligation, the obligee protected by the bond, and the surety guaranteeing the principal's performance.

Exclusive remedy doctrine

Workers compensation is the employee's exclusive remedy against the employer for work-related injury, barring most tort lawsuits in exchange for no-fault benefits.

Temporary total disability

Workers compensation benefit replacing a portion of lost wages, commonly two-thirds of average weekly wage, while the injured worker is unable to work but recovering.

Workers compensation Part Two

Employers liability coverage in a workers compensation policy, paying third-party tort claims arising from work injuries when the statutory exclusive remedy does not bar suit.

Workers compensation premium basis

Premium is calculated per $100 of payroll multiplied by the classification rate, then adjusted by an experience modification factor and any premium discounts.