Frequently Asked Questions

IL Group

Quote Process

Procedural

Outsourcing

Insurance Pricing

Lender-Placed Coverage

Collateral Insurance

Blanket

Flood Zones

Other

Is IL Group an insurance company?

No, IL Group is an independent wholesale insurance broker specializing in insurance products and services for the financial institution and independent agencies.

Does IL Group do outsourcing?

IL Group acts as a wholesale insurance broker and consultant, assisting our clients with selecting the best products and services customized specifically for them. While IL Group does not perform the outsourcing functions internally, we utilize the services of the leading providers in the industry, which allows us to provide you with the solution that meets your unique needs.

What insurance companies does IL Group represent?

IL Group represents a number of different insurance carriers, allowing us to find the product that best suits your specific coverage requirements.

What are the A.M. Best ratings of the insurance carriers IL Group represents?

IL Group only utilizes insurance carriers that are rated A- or higher by A.M. Best, the global credit rating agency with a unique focus on the insurance industry.

What outsourcing firms does IL Group represent?

IL Group utilizes a number of different outsourcing providers, as each provider typically targets a specific market segment. This allows IL Group to match our clients with the provider that will best meet their needs.

Does IL group handle claims?

Claims are handled by each insurance carrier and adjusted by the carrier’s internal claims staff.

Is IL Group a privately owned company?

Yes, IL Group is a privately owned company.

What is the background and experience of IL Group’s associates?

Our staff includes seasoned veterans from the Loan Servicing, Banking and Insurance industries. For information on our key employees, please see their profiles at: https://ilgroup.com/il-group-history/il-group-management-team/

What products do you offer?

IL Group offers products for both residential and commercial properties, as well as for automobiles and collateral. These products include Lender-Placed Hazard Insurance, Lender-Placed Flood Insurance, Lender-Placed REO Liability Insurance, Lender-Placed Wind Insurance, Collateral Protection Insurance, Vendors/Lenders Single Interest Insurance, Blanket Mortgage Fire Insurance, Flood Determination Services and Amenities Protection Plus Insurance.

Does IL Group conduct business in all states?

Yes. IL Group currently holds an agency insurance license in 49 states, plus the District of Columbia. In addition, senior management holds producer licenses in all 50 states, plus the District of Columbia.

Where is your home office?

IL Group is headquartered in Gulf Shores, Alabama, with employees located in several other cities and states.

What is the time frame for getting a quote?

The amount of time required to obtain a quote varies depending upon the complexity of the product lineup required. Most quotes can be obtained within 30 days. Please contact your IL Group Sales Professional for specifics.

What info do you need for a quote?

The type of information required to obtain a quote varies based upon the product selection and location of the portfolio. Please contact your IL Group Sales Professional for specifics.

Are there any costs required to obtain a quote?

No. There is no charge to obtain a quote.

Are there any front end/set/retainer costs to do business with IL Group?

No. IL Group does not charge a fee to the client to do business with our firm.

Can we pay our premiums monthly instead of annually?

Yes, depending upon the service center utilized, monthly premium payment options may be available. Please advise your IL Group Sales Representative if you desire the monthly premium option.

Who pays the premium?

Responsibility for premium payment varies depending upon the type of policy purchased by the lender. In standard lender-placed/force-placed insurance, the premium is typically passed on to the consumer associated with the specific loan that requires coverage. The premium for blanket policies may either be paid by the lender, or in certain circumstances, passed on to the consumer.

How far can you back date coverage for both fire and flood insurance?

The ability to backdate a policy depends upon the specific carrier and vendor selected. However, in most cases, a policy may be backdated to either the first day of the current month, or 30 days. In some situations, the carrier may require the lender to submit a “statement of no loss” certifying that there has been no known loss at the time of the request for the backdated policy.

How are second Mortgages/HELOC’s tracked?

Most often, hazard/fire insurance for second mortgages and HELOC’s is not specifically tracked. Instead, a blanket insurance policy is purchased by the lender, eliminating the need to track. Lacking a blanket policy, the lender should continue to track the hazard insurance policy to protect its interest.

Flood insurance must always be tracked as mandated by FEMA.

Should we place at Last Known Coverage or Unpaid Principal Balance?

The amount of coverage selected is dictated by specific regulatory and investor requirements.

What duties or functions are handled via outsourcing?

Any, all or none of the insurance tracking functions may be outsourced to a third party provider. Functions most commonly outsourced include mail handling, system updates, open item tracking, customer service and escrow disbursements. In addition, Loss Drafts may also be outsourced.

What is the implementation period for outsourcing?

In most cases, outsourcing may be implemented within 90 days from the date the lender makes a decision to move to an outsourcing provider.

Is there a minimum number of loans required to outsource?

While there is no official minimum loan count requirement to outsource, it may not be financially feasible to outsource. Please consult your IL Group Sales Professional for further details.

Do you have standard Service Level Agreements (SLA’s)?

While there are standard SLA’s utilized by all IL Group vendors, specific SLA’s will be identified for each lender.

What are the rates?

Insurance rates vary by insurance carrier, state and product line. Other factors include your company’s specific loss experience, deductible preferences, and any other specific coverage enhancements you may desire. Please contact your IL Group Sales Representative to discuss further.

Why do other companies have lower or higher rates?

Since rates vary based upon many factors, it is difficult to give a definitive reason. However, specific considerations may be the property location, lower or higher deductibles, and the financial institution’s specific loss experience.

How are you paid? Will the rates be increased to use your company?

As an independent insurance agent, IL Group will receive a commission directly from the insurance carrier for any insurance policies/certificates that are issued and paid for by the lender. This commission is automatically built into the insurance product and does not cause any increase in pricing to the lender.

Do you offer homeowner-type coverage (contents, liability, loss of use) on lender-placed policies?

Homeowner-type coverage is typically not provided on a lender-placed policy. The original loan documents executed between the lender and the consumer typically establish that the lender has the right to protect its interest, which typically does not extend to those additional coverages.

For foreclosed residential properties, Commercial General Liability coverage, commonly referred to as REO Liability, may be purchased by the lender. This coverage provides “premises liability” in the event someone is injured on the property. Special conditions and limitations apply – refer to specific policy wording for details.

Do you offer REO insurance?

Yes, REO Insurance, which is insurance for foreclosed properties while in the bank’s portfolio, may be purchased.

Is this homeowner insurance?

No, lender-placed insurance is not homeowners insurance.

What does Lender-Placed coverage cover?

Lender-Placed policies extend coverage to Residential and Commercial properties, their completed additions and installed fixtures and equipment that are a permanent part of the structure, in addition to detached structures. The policy typically covers the perils of Fire, Lightning, Explosion, Windstorm or Hail, Smoke, Aircraft or Vehicles, Riot or Civil Commotion, Vandalism, Sprinkler Leakage, Sinkhole Collapse and Volcanic Eruption. Common exclusions include Ordinance or Law, Nuclear Hazard, War and Military Action, Governmental Action, Flood and Water [which may be covered under a separate policy], Earth movement, Landslide, Subsidence, Collapse, Neglect, Design Defect and Mechanical or Electrical Breakdown. Refer to your policy for all specific terms, conditions and exclusions.

Are loans in a COBRA Zone covered by our policy?

While properties located in COBRA zones are not eligible for flood coverage under the NFIP Flood Program, they may be able to obtain coverage under a lender-placed flood insurance program. This varies from carrier to carrier, so you should refer to your Master Policy for details.

What is automatic coverage?

Automatic coverage allows protection of the Master Policy to automatically cover a loss to a property although a certificate of insurance has not been issued. Certain conditions may apply, refer to your Master Policy for details.

Do you cover poultry farms?

Yes. However, some insurance policies specifically exclude the property to be used for certain types of activity. In addition, the policy must be endorsed to allow coverage. Please refer to your Master Policy for details.

Do we have liability coverage in our policy?

Liability coverage to protect the lender is available for Foreclosed/REO properties. A separate Master Policy for Commercial General Liability is typically issued, and you must request and pay for coverage for each specific property requiring coverage.

Liability coverage is not included for non-foreclosed properties.

For mortgages, what amount of hazard insurance coverage should we purchase when force-placing?

Historically, most lenders have obtained coverage based upon one of two criteria – [1] the amount of coverage the homeowner had previously purchased from an outside provider, known as Last Known Hazard, or [2] the unpaid loan balance. Recently, regulators have begun weighing in on the appropriate amount of coverage that a lender should place. In addition, investors set guidelines within their servicing standards that dictate the appropriate amount of coverage. Please refer to your Compliance Department, Legal Advisor, Regulator or Investor Guidelines for specific instructions.

What is considered collateral?

Collateral is any piece of physical property that is used to secure a loan by the lender. Collateral may include automobiles, trucks, airplanes, watercraft, farm tractors, business equipment, business inventory, etc.

Do you offer insurance for collateral?

Yes, IL Group provides insurance coverage for collateralized loans as well as real estate.

What is CPI?

CPI, also known as Collateral Protection, is lender-placed or force-placed insurance to protect the piece of collateral used to secure a loan.

What is VSI?

VSI, also known as “Vendors Single Interest,” or more recently LSI, “Lenders Single Interest,” is a blanket policy purchased by the lender to cover all loans and generally eliminates the need to track and force place coverage.

What is 'Waiver of Repossession' coverage?

This optional CPI coverage eliminates the need for a lender to repossess covered collateral before filing a claim.

What is 'Waiver of ACV' coverage?

This is optional CPI coverage which eliminates the Actual Cash Value (ACV) loss settlement option in most cases, allowing the loss settlement to be either the “Cost to Repair” or “Loan Balance.”

What is Automatic Coverage?

This CPI coverage provides coverage in the event that a piece of tracked collateral is in the notice cycle or the administrator has not yet recognized the need for placement of CPI (force-placed insurance).

What is Pro-Rata Coverage?

For CPI policies, this insures that refunds of unearned premiums will be calculated on a daily Pro Rata basis.

What is 120 Past Due Payment Coverage?

An optional coverage that when calculating a loan balance claim settlement, coverage will include the first 120 days of past due payments.

What is Repossession Expense Reimbursement?

An optional CPI coverage that reimburses the lender for the expense of repossession of the collateral (storage, towing, mechanic’s lien), up to the specified policy limit.

What is Mechanic’s Lien Reimbursement Coverage?

An optional CPI coverage that will reimburse the lender for the expense incurred in connection with retaking possession of the collateral as the result of a prior mechanic’s lien on the collateral.

What is Conversion, Secretion & Confiscation coverage?

An optional CPI coverage that provides coverage for the direct loss sustained by the lender due to conversion, secretion or confiscation of the insured collateral that is described on the Notice of Insurance.

What is Deficit Unpaid Balance Protection?

An optional CPI coverage that, following the sale of the repossessed collateral, if there is a remaining deficiency balance and a portion of the balance consists of earned CPI premium, allows the lender to file a claim for the earned premium as long as no other CPI claim has been paid on the loan.

How does Physical Damage Losses coverage apply?

This VSI coverage applies only to collateral that the financial institution has repossessed, which has physical damage to it at the time the repossession occurred, and where there was no primary insurance in effect for the borrower or lender.

What is Non-Filing Losses?

For VSI, this coverage includes losses the institution suffered due to its inability to obtain possession, or enforce their rights under the title, because of unintentional failure to perfect their lien.

What is SKIP?

This VSI coverage covers losses suffered because the institution is unable to locate any maker, co-maker or the collateral.

What is Repo Collateral Losses?

For VSI, this All-Risk coverage is intended for vehicles that sustain damage in the first sixty (60) days following repossession, while in the institution’s care.

What is GAP or Waver of ACV Settlement Option?

The standard VSI policy settles claims on the lesser of 3 options (1) Actual Cash Value of the collateral, (2) Net Balance, or (3) the Repair Estimate, whichever is less. The GAP Endorsement is intended to protect the lender’s interest in the event of a total loss under Coverage A – All Risk Physical Damage, or Coverage C – Skip or Confiscation, and is generally valid up to $5,000 per occurrence.

For VSI, if there is more than one piece of collateral on the loan, do we charge for each piece of collateral?

No. There is only one charge per note, regardless of the number of pieces of collateral.

For VSI, what is the bank’s responsibility on tracking the customer’s primary insurance?

Subject to any policy provisions, generally, the financial institution must require all borrowers to obtain insurance on their collateral at the time the loan is made, and the borrower must agree to do this.

For VSI, if the collateral has been damaged but the loan is not in default, can we file a claim under the policy?

No. The policy states that the customer must be in default and the financial institution must suffer an impairment of interest before a claim can be filed.

Under a VSI policy, must the financial institution repossess the collateral in order to file a claim?

Yes. The financial institution must legally repossess all listed collateral on the note and be in the position to convey good title to the insurance company, if necessary.

Can I just get a blanket type policy for my loans instead of tracking individual loans?

Blanket Insurance policies may be used to cover hazard insurance requirements on both residential and commercial properties, as well as automobiles and other collateral. However, Flood Insurance, which is regulated by FEMA, must continue to be tracked and force-placed as needed. In addition, some investor or other regulatory requirements may require you to continue tracking insurance and force-placing as needed.

REO/Foreclosed properties may not be covered by a blanket policy and must be individually reported for coverage to apply.

Under the FEMA flood mapping program, what Flood Zone designations are considered to be in a “required zone,” meaning flood insurance must be purchased if a property is located in these zones?

Flood Zones beginning with an “A” or “V.”

Under the FEMA flood mapping program, what Flood Zone designations are considered to be “outside a required zone”, meaning flood insurance is not required to be purchased when a property is located in one of these zones?

Flood Zones beginning with “B”, “C”, “D” and “X.”

Is there a minimum number of loans required for you to write a policy?

IL Group does not have a minimum client size in order to obtain a policy. However, some insurance carriers or products may have specific minimums.

May we do business with two providers at the same time?

The products and services offered by IL Group and our providers are offered with the understanding that you will not utilize another program during the term of our relationship.

What is Lender-Placed/Force-Placed Insurance?

Lender-placed insurance, also referred to as force-placed insurance or creditor-placed insurance, is coverage that a lender purchases for a property or piece of collateral to protect its interests when the borrower fails to purchase homeowners, fire, automobile or similarly required insurance.

Is Lender-Placed Insurance the same as PMI?

No. Lender-Placed Insurance protects a property or other collateral against damage from covered perils, such as wind, hail, vandalism, collision, etc. PMI, also known as private mortgage insurance, provides protection to the lender in the event the borrower fails to make payments and the lender must foreclose or repossess the collateral.

Is Lender-Placed coverage the same as accidental death coverage?

No. Lender-Placed Insurance protects a property or other collateral against damage from covered perils, such as wind, hail, vandalism, collision, etc. Accidental Death Insurance typically pays a benefit to the beneficiary of the policy in the event the insured dies and the cause of death was the result of an accident.

Will IL Group accept our standard NDA?

In most cases, yes. However, the NDA must be reviewed by IL Group management and legal department. In some cases, modifications may be requested.

What are the Wind Pool States?

Wind pools are government chartered nonprofits that insure high-risk properties that are unable to obtain insurance from a private carrier. States located along the Gulf of Mexico and Atlantic Ocean will typically have a wind pool.

General Disclaimer

These FAQ’s are provided as a general guide.  Specific insurance carrier requirements, policy language, state or federal laws and regulations as well as other conditions apply and modify these general answers.  Please consult your policy and other applicable laws and regulations.