Illinois Compiled Statutes 815 ILCS 180/10 – Placement of collateral protection insurance
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A creditor may place collateral protection insurance provided the following conditions are met:
(1) the debtor has entered into a credit transaction with the creditor;
(2) the credit transaction has been reduced to a credit agreement, and the credit agreement requires the debtor to maintain insurance on the collateral; and
(3) a notice substantially similar to the following has been included in the credit agreement or on a separate document provided to the debtor and to any cosigner, guarantor, or other person liable with the debtor for the obligation, at the time the credit agreement is entered:
“Unless you provide us with evidence of the insurance coverage required by your agreement with us, we may purchase insurance at your expense to protect our interests in your collateral. This insurance may, but need not, protect your interests. The coverage that we purchase may not pay any claim that you make or any claim that is made against you in connection with the collateral. You may later cancel any insurance purchased by us, but only after providing us with evidence that you have obtained insurance as required by our agreement. If we purchase insurance for the collateral, you will be responsible for the costs of that insurance, including interest and any other charges we may impose in connection with the placement of the insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance may be added to your total outstandingbalance or obligation. The costs of the insurance may be more than the cost of insurance you may be able to obtain on your own.”
(1) the debtor has entered into a credit transaction with the creditor;
Terms Used In Illinois Compiled Statutes 815 ILCS 180/10
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. Source: OCC
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
(2) the credit transaction has been reduced to a credit agreement, and the credit agreement requires the debtor to maintain insurance on the collateral; and
(3) a notice substantially similar to the following has been included in the credit agreement or on a separate document provided to the debtor and to any cosigner, guarantor, or other person liable with the debtor for the obligation, at the time the credit agreement is entered:
“Unless you provide us with evidence of the insurance coverage required by your agreement with us, we may purchase insurance at your expense to protect our interests in your collateral. This insurance may, but need not, protect your interests. The coverage that we purchase may not pay any claim that you make or any claim that is made against you in connection with the collateral. You may later cancel any insurance purchased by us, but only after providing us with evidence that you have obtained insurance as required by our agreement. If we purchase insurance for the collateral, you will be responsible for the costs of that insurance, including interest and any other charges we may impose in connection with the placement of the insurance, until the effective date of the cancellation or expiration of the insurance. The costs of the insurance may be added to your total outstandingbalance or obligation. The costs of the insurance may be more than the cost of insurance you may be able to obtain on your own.”