(815 ILCS 180/10)
Sec. 10.
Placement of collateral protection insurance.
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 outstanding
balance or obligation. The costs
of the insurance may be more than the cost of insurance you may be
able to obtain on your own."
(Source: P.A. 89-623, eff. 8-9-96.)
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