Illinois Property & Casualty Course Notes

Know the standard DP-1/DP-2/DP-3 progression: Basic and Broad are named-perils forms; Special generally uses open-perils coverage on the dwelling while personal property remains named-perils, all subject to exclusions and conditions. Master the standard homeowners forms and the split between Section I property coverage and Section II liability coverage. Commercial property coverage separates what property is insured from what causes of loss are insured; the Building and Personal Property form and Basic/Broad/Special Causes of Loss forms are core exam concepts. Business Income and Extra Expense are time-element coverages that generally require a covered cause of direct physical loss or damage causing a suspension of operations during the period of restoration. A Businessowners Policy packages property and liability coverage for eligible small-to-medium businesses and commonly includes business income/extra expense; commercial auto, workers compensation and professional liability are not automatically part of the BOP. Inland marine commonly follows movable, specialized or transit property; Equipment Breakdown is distinct specialized property coverage for defined mechanical, electrical or pressure-system breakdowns. Standard homeowners/renters policies generally exclude flood and earthquake; flood can be purchased through the NFIP or private insurers, and earthquake protection generally requires separate coverage or endorsement. Valuation answers how much a covered property loss is worth: ACV commonly equals replacement cost minus depreciation; replacement cost does not deduct depreciation once policy conditions are satisfied; agreed value and functional replacement solve different valuation problems. Property loss settlement requires applying the valuation method, any coinsurance requirement, the deductible and the applicable policy limit in the order dictated by the policy. Conditions set contractual requirements, exclusions remove specified risks, duties after loss protect the claim process, and appraisal resolves disputes over amount of loss—not whether coverage exists.

• dwelling policy forms and covered perils: Named perils: the insured generally must show that a listed peril caused the loss.

• dwelling policy forms and covered perils: For a DP question, identify the form first, then ask whether the damaged property is the dwelling or personal property.

Premises/operations exposure concerns ongoing activities and conditions at operating locations; products-completed operations concerns injury or damage arising from products after possession is relinquished or work after it is completed/abandoned away from the insured's premises, subject to the CGL definition. Negligence generally requires duty, breach, proximate/legal causation and damages; liability analysis also distinguishes compensatory/punitive damages, defenses, comparative fault and strict liability. The standard CGL framework separates Coverage A bodily injury/property damage liability, Coverage B personal and advertising injury liability, and Coverage C medical payments. Occurrence coverage is triggered primarily by when injury/damage occurs; claims-made coverage is highly sensitive to when the claim is first made/reported and to any retroactive date and extended reporting period. Personal Auto coverage separates third-party liability, first-party medical payments, UM/UIM and physical damage (collision/other than collision). Business Auto coverage uses covered-auto categories and insured-status rules to address owned, hired, nonowned, temporary substitute and newly acquired vehicles used in business. Workers Compensation Part One pays statutory benefits for covered work-related injury/occupational disease; Employers Liability Part Two addresses certain employer liability not paid as workers compensation, subject to exclusions and limits. Excess liability adds limits above scheduled underlying policies; an umbrella may also provide broader coverage for some exposures, sometimes subject to a self-insured retention. Commercial crime distinguishes employee dishonesty, theft, robbery, burglary, forgery/alteration and related causes; fidelity and surety involve different relationships and purposes. Professional liability covers claims arising from negligent professional services; related specialty forms include medical malpractice, D&O, EPLI, cyber liability/data breach and liquor liability. Casualty policy conditions determine how overlapping insurance, subrogation, notice/cooperation, defense, settlement and other claim duties operate.

• products-completed operations and premises/operations: Ongoing work/premises condition = premises/operations; finished work/product after possession/completion = products-completed operations.

• products-completed operations and premises/operations: Ask: Was work still underway? Was the product still in the insured's possession?

Illinois prohibits an auto insurer from surcharging or refusing an applicant solely because of the identity of the applicant's prior auto insurer, unless the applicant fails to provide prior loss experience within 21 calendar days after application. Illinois financial-responsibility law uses minimum auto liability limits of $25,000 bodily injury/death per person, $50,000 per crash for two or more persons, and $20,000 property damage. Illinois UM protects against uninsured/hit-and-run motorists; UIM addresses an at-fault motorist whose applicable bodily injury liability limits are lower than the insured's UIM limit, with statutory limit/offset rules. Illinois generally requires workers compensation insurance when an employer has one employee, even part-time; coverage begins from hire, and an insurance policy securing compensation liability must cover all employees and the employer's entire compensation liability subject to statutory exceptions. For policies within the relevant Illinois statutory classes, cancellation notice is generally mailed at least 30 days before cancellation, with a 10-day rule for nonpayment; nonrenewal under 215 ILCS 5/143.17 generally requires at least 30 days advance mailed notice and proof of mailing. The Illinois FAIR Plan is a residual-market mechanism designed to improve access to basic property/homeowners insurance for eligible applicants unable to obtain coverage in the voluntary market after diligent effort. Illinois improper-claims-practice law requires accurate coverage representations, reasonable promptness and good-faith claim handling; denials/compromise offers must receive a prompt reasonable and accurate policy/legal explanation when the statutory conditions apply. Illinois 215 ILCS 5/154.6(n) identifies failure to promptly provide a reasonable and accurate policy/legal explanation for a claim denial or compromise settlement as an improper claims-practice act when statutory conditions are met.

• Official 2026 Illinois casualty outline: Auto — surcharge or refusal to insure (Ref. 215 ILCS 5/155.27): Prior carrier identity ≠ loss history.

• Official 2026 Illinois casualty outline: Auto — surcharge or refusal to insure (Ref. 215 ILCS 5/155.27): Look for the words 'solely because of prior carrier.'

The Illinois Director of Insurance has statutory regulatory powers to examine, investigate, hold hearings and enforce the Insurance Code; the Department does not replace civil courts for private tort damages. Illinois requires the correct producer line of authority to sell, solicit or negotiate insurance; a producer license authorizes the licensed line but does not itself create authority to bind or commit an insurer. Illinois resident producers generally complete at least 24 hours of continuing education before each two-year renewal, including 3 hours of classroom/webinar ethics, and are subject to discipline for specified misconduct. Illinois producers hold insurance money in a fiduciary capacity and must avoid misappropriation, misrepresentation and unfair practices; insurers also face statutory claims-practice standards.

• Director/Department authority: Department enforcement = regulatory; circuit court = private civil damages/judicial remedies.

• Director/Department authority: If the question asks what the Director can do, choose investigate/examine/hear/enforce—not rewrite contracts or award tort damages like a court.