Illinois Casualty Study Guide

Illinois casualty law has a consistent instinct running through it: coverage the insured did not knowingly give up stays in the policy. Uninsured motorist bodily injury coverage cannot be waived at all. Underinsured coverage attaches automatically at the level of the uninsured coverage in the same policy. An insurer that sits on a claim loses rights. Read the auto statutes with that instinct and most questions answer themselves — then switch mental gears entirely for workers’ compensation, which is all deadlines.

Auto — mandatory, and mandatory in an unusual way

Illinois is a tort state. There is no no-fault system and no mandatory PIP; medical payments coverage exists but is optional. Compulsory minimum liability limits are 25/50/20 — $25,000 bodily injury per person, $50,000 per accident, $20,000 property damage.

Uninsured motorist bodily injury is mandatory and cannot be waived. The statute is written as a prohibition on the insurer: “No policy … shall be renewed, delivered, or issued for delivery in this State unless coverage is provided therein” for bodily injury caused by uninsured and hit-and-run motor vehicles, at least at the § 7-203 limits.

Uninsured motorist property damage works the opposite way, and it sits in the same section. It is rejected by omission: “the absence of a premium payment for uninsured motorist property damage shall constitute conclusive proof that the applicant or policyholder has elected not to accept” it. Maximum deductible $250. Two coverages, adjacent in one statute, with opposite default rules.

Underinsured motorist hangs on a different subsection than most summaries suggest, and the difference is worth holding. § 143a-2(4) requires UIM in “an amount equal to the total amount of uninsured motorist coverage provided in that policy” wherever that coverage exceeds the § 7-203 minimums. UIM therefore tracks the UM limit automatically; there is no separate election to make.

What §§ 143a-2(1) and (2) govern is something else — additional uninsured motorist coverage. The insurer must offer it at the insured’s bodily injury liability limits, and the insured may reject it in writing, but the rejection reaches only the excess over § 7-203. So the floor holds there too. Welding the two together into “UIM must equal your BI limits and can be reduced to 25/50” is a common shortcut that mixes up the subsections.

Two numbers that decide UM claims

The arbitration ceiling. An arbitrators’ award binds only up to $75,000 for bodily injury to one person and $150,000 for two or more in one crash — “or the corresponding policy limits for bodily injury or death, whichever is less.” Above that, arbitration is not the end of the matter.

The subrogation trap. An insurer may not exercise subrogation against an underinsured tortfeasor where it received written notice and then failed to advance a payment within 30 days. Thirty days of inaction costs the carrier its recovery.

Comparative negligence — say it precisely

735 ILCS 5/2-1116 bars a plaintiff “if the trier of fact finds that the contributory fault on the part of the plaintiff is more than 50%.” Below that, damages are simply diminished in proportion.

The phrasing matters more than usual here. A plaintiff found exactly 50% at fault still recovers — half their damages. So an answer choice reading “barred at 50% or more” is wrong, and the loose shorthand “50% bar” will lead you to it. Illinois bars at 51% and above.

Workers’ compensation — a competitive market with hard clocks

Illinois is competitive, not monopolistic. The Workers’ Compensation Commission states it plainly: “In Illinois, w.c. insurance is sold in the private sector,” insurers have set their own rates since 1983, and Illinois has more companies writing workers’ compensation than any other state. Roughly 90% of employers buy insurance; the rest qualify to self-insure.

The residual market — the market of last resort for employers no carrier will write — is administered by NCCI, and the IWCC notes premiums there run “about 50% more than the open market.”

Then the deadlines, which is where the exam lives:

Notice to the employer: 45 days. “The employee must notify the employer as soon as practicable, but no later than 45 days after the accident.”

Filing the claim: 3 years after the injury, or 2 years after the last payment of temporary total disability or a medical bill — whichever is later. The “whichever is later” is doing real work; ongoing treatment keeps the window open.

Waiting period: three lost workdays — with a retroactive switch. TTD is not paid for the first three lost workdays “unless the employee misses 14 or more calendar days due to the injury,” in which case benefits run back to day one. Note the units change mid-rule: three workdays, fourteen calendar days.

Temporary total disability: 66⅔% of the average weekly wage, subject to a maximum tied to the state average weekly wage. The IWCC resets its rate table every six months and publishes it by January 15 and July 15, so quote the rule and look up the dollar figure rather than memorising one.

Burial benefit: $8,000, payable to the widow or widower, other dependent, next of kin, or whoever incurred the expense.

Surplus lines — three insurers, and a file that names names

An Illinois casualty producer with surplus lines authority may place a risk the admitted market will not take, after a diligent effort to place it with admitted insurers. Illinois does put a number on that effort — it just lives in the rule rather than the statute, which is why it is easy to miss. Under 50 Ill. Adm. Code 2701.50(a), diligent effort “shall be deemed to have been exercised if the surplus line producer or the referring insurance producer submits a risk to three or more authorized insurers” that actually write the class of risk involved.

Two companion sections finish the picture, and both are tested more often than the count itself:

• § 2701.60 — the record. The diligent-effort file must state “the name of the authorized insurers and the individuals contacted at each insurer who declined the risk.” Reaching three is not enough on its own; naming the underwriter you reached is part of the requirement.
• § 2701.70 — no manufactured declinations. A submission to an insurer that would not write the class of risk anyway does not count toward the three. You cannot build the file out of predictable refusals.

The surplus lines licence is $400 a year — annual, not biennial — on top of your producer licence. The tax is 3.5%, plus a 0.04% stamping fee for policies effective 1 January 2023 or later, and filings run twice a year, by February 1 and August 1.

And say the consequence to the client out loud: a surplus lines policy is not backed by the Illinois Insurance Guaranty Fund, which covers only insolvent member insurers — insurers licensed here.