Illinois Property Insurance Basic Principles Practice Test

Supplemental Payments describe costs that the insurer will pay in addition to the policy’s liability limit. In auto policies, this typically covers items like defense costs, court costs, interest on judgments, the insured’s loss of earnings, and bail bonds, all outside the limit. Because these payments are added on top of the limit, they don’t reduce the amount available to pay a claim. Deductibles are amounts the insured pays before coverage kicks in; endorsements are policy modifications; premium credits reduce the premium. So the concept shown here matches the idea of extra costs paid beyond the stated limits.