On the Illinois Property & Casualty exam, the Personal Automobile Policy appears both as a standard ISO-style contract and as a set of Illinois auto statutes you must apply. This standalone guide reviews the policy's coverage parts, then drills into the Illinois overlay: the 25/50/20 financial-responsibility minimums, the at-fault (tort) system with modified comparative negligence, the mandatory uninsured- and underinsured-motorist rules, and cancellation/nonrenewal notice. The Illinois-specific material is where most state credit is earned.

Policy structure (the national base)

The Personal Auto Policy (PAP) is a packaged contract organized into lettered parts:

• Part A — Liability: pays bodily injury (BI) and property damage (PD) the insured is legally liable for; the insurer provides a defense, and defense costs are paid in addition to the limit.
• Part B — Medical Payments: pays medical/funeral costs for occupants regardless of fault.
• Part C — Uninsured/Underinsured Motorists: pays the insured's injuries when the at-fault party is uninsured or underinsured.
• Part D — Coverage for Damage to Your Auto: Collision and Other Than Collision (Comprehensive), each with a deductible, settled at Actual Cash Value (ACV).
• Part E — Duties After an Accident or Loss and Part F — General Provisions.

Limits may be written as split limits (e.g., 100/300/50) or as a Combined Single Limit (CSL). Insureds include the named insured, resident spouse, resident relatives, and permissive users. Eligible vehicles are private passenger autos, pickups, and vans not used mainly for business. That framework is national; Illinois governs the limits and the liability environment around it.

Illinois uses a tort (at-fault) liability system

Illinois is an at-fault / tort state, not a no-fault state. The driver who causes a crash is financially responsible, and the injured party collects from that driver's liability coverage or by filing suit. This is why liability coverage and financial responsibility dominate Illinois auto law.

Illinois applies modified comparative negligence. The rule to remember: a claimant who is more than 50% at fault is barred from recovering anything. If the claimant is 50% or less at fault, they may recover, but the award is reduced by their own percentage of fault. (Contrast this with pure comparative states, where even a 90%-at-fault claimant recovers a sliver.)

Financial responsibility: 25/50/20

Every Illinois driver must show financial responsibility, usually by carrying liability insurance at or above the minimum split limits:

• $25,000 bodily injury per person
• $50,000 bodily injury per accident
• $20,000 property damage per accident

Shorthand: "25/50/20." These are statutory floors; producers routinely recommend higher limits. Illinois also runs a random electronic insurance verification program, and driving without coverage brings fines, license-plate suspension, and reinstatement fees. A deposit or bond can satisfy financial responsibility, but liability insurance is the standard method.

Uninsured and underinsured motorist rules

This is a heavily tested Illinois area:

• Uninsured Motorist (UM) bodily injury coverage is MANDATORY on every Illinois auto policy, at limits at least equal to the 25/50 BI minimums. UM also responds to hit-and-run drivers.
• Underinsured Motorist (UIM) must be provided/offered at limits matching the policy's UM/BI limits. In practice, when an insured buys UM above the statutory minimum, UIM is required at the same limits; the insured can typically reject higher UIM in writing.
• UIM pays the gap between the at-fault driver's lower BI limits and the insured's UIM limit.
• The other driver must be legally at fault for UM/UIM to respond.

Memorize the headline: in Illinois, UM is mandatory (not optional), and UIM tracks the BI limits.

Optional and physical-damage coverages

• Medical Payments (Med Pay) is optional and pays medical/funeral costs regardless of fault. Illinois does not mandate PIP/no-fault.
• Collision and Comprehensive (Other Than Collision) are optional but typically required by a lender. Hitting an animal is Comprehensive, not Collision.

Cancellation and nonrenewal

Illinois regulates how an insurer may end a personal auto policy. The timelines are commonly cited as:

• Mid-term cancellation generally requires advance written notice (often around 30 days, with a shorter window—about 10 days—allowed for nonpayment of premium).
• Once a policy has been in force a set period (commonly 60 days), cancellation is limited to specific reasons such as nonpayment, license suspension/revocation, or fraud/material misrepresentation.
• Nonrenewal at the end of the term generally requires advance written notice (commonly around 30 days) so the insured can find replacement coverage.

Keep the shorter nonpayment-cancellation notice distinct from the longer ordinary cancellation / nonrenewal notice.

Required vs. optional coverages

Key Illinois numbers to memorize

Common exam traps

• Illinois is at-fault (tort), not no-fault. There is no mandatory PIP.
• 25/50/20—the $20k is property damage; don't slide it into a BI slot.
• UM is mandatory in Illinois, not just "offered."
• Modified comparative negligence: more than 50% at fault = barred (the 50% bar, not a 51% bar—be careful with the wording).
• UIM fills the gap up to your UIM limit minus the other driver's BI payment; it is not a separate full payout.
• Hitting an animal is Comprehensive, not Collision (national rule still applies).
• Liability defense costs are paid on top of the limit (national rule that still applies in Illinois).

Quick recap

• The PAP's Parts A–F structure is national; Illinois sets the limits and legal framework.
• Illinois is a tort/at-fault state using modified comparative negligence—a claimant more than 50% at fault recovers nothing.
• Minimum liability is 25/50/20.
• Uninsured Motorist BI is mandatory (at least 25/50), and Underinsured Motorist is required/offered at the policy's BI limits.
• Illinois has no mandatory no-fault/PIP; Med Pay and physical damage are optional.
• Cancellation for nonpayment uses a shorter (~10-day) notice; ordinary cancellation/nonrenewal uses a longer (~30-day) notice.