Illinois requires every driver to carry liability insurance of at least $25,000 per person and $50,000 per crash for bodily injury, plus $20,000 for property damage. Those minimums are a legal floor, not real protection. They pay only for the harm you cause other people, and a single serious injury can burn through $25,000 before anyone leaves the hospital. Here is what the state mandates, what your lender may require, and which optional coverages are worth the extra premium.
Required Coverage: Liability
The Illinois Vehicle Code requires drivers to carry auto insurance for the driver’s and the public’s safety. The primary coverage the state mandates is liability coverage, which pays for property damage or bodily injury you cause to another person, things like their medical bills and vehicle repairs, when you are the at-fault driver. Liability coverage is for the benefit of other drivers, pedestrians, and property. It does not insure your own injuries or your own personal property. It is divided into two parts:
- Bodily Injury (BI), which insures pedestrians, passengers of another car, and, possibly, your own passengers who are not members of your household. Per the state’s law, the BI is at least $25,000 per person per accident and, at most, $50,000 for two or more persons per accident
- Property Damage (PD), which bears the expense of vehicle damage to another person or property like fences, poles, and buildings. PD in Illinois is at least $20,000 per accident
Your insurance carrier will find and hire a lawyer for you in the event of a vehicular accident lawsuit and will cover liability if you are found at fault. Based on the Illinois Department of Transportation Crash Statistics, personal cars accounted for the most fatalities and injuries in 2018, so vehicular damage is common, and these minimums keep you from being financially blindsided by it.
Physical Damage Coverage
Liability coverage will not insure your own injuries or damage to your own vehicle. For that, you can add Physical Damage Coverage. Although Illinois law does not require this coverage, your lender may. It covers repairs to your own vehicle and is divided into two types: collision coverage and comprehensive coverage. Some insurance carriers will require you to secure comprehensive coverage before getting a collision coverage.
Collision Coverage
Collision coverage will pay for your vehicle damages due to collision with another car or a fixed object (post or tree), or when your car overturns due to the impact. Typically, this insurance type will require an out-of-pocket amount (deductible) amounting to $0 to $1,000 before the coverage takes effect.
Comprehensive Coverage
Comprehensive coverage insures your car in the event of theft, fire, falling tree or debris, hail, vandalism, and any other causes aside from collisions. According to the Insurance Information Institute, Illinois belongs in the top 10 US States with the most vehicle thefts in 2018, which adds to the list of worries for vehicle owners in the state. Comprehensive coverage is sometimes used by insurance carriers as a prerequisite for collision coverage.
While Physical Damage Coverage is optional, having it can save you from financial distress if you are involved in an accident. The type of car you own and your capacity to repair it yourself or purchase a new one may help you decide whether to get this coverage.
Medical Payments
Medical Payments insurance is an addition to your primary policy that helps pay for your own medical bills after an auto accident. It is not required in Illinois, because the mandatory liability coverage only pays for injuries to other drivers, pedestrians, and property. Medical Payments coverage will cover your medical bills and funeral expenses in the event you are killed in an accident in your vehicle, even when you are the at-fault driver. It also covers you and your family members when in an accident in another automobile or while walking. Because compensation from another at-fault party’s insurer may take weeks or months to settle, Medical Payments coverage is a good safety net that keeps you covered no matter the circumstance.
Uninsured and Underinsured Motorist Coverage
While liability coverage protects other drivers, pedestrians, and property, Uninsured Motorist Bodily Injury Coverage (UM) and Underinsured Motorist Bodily Injury Insurance (UIM) are meant to protect you when the at-fault driver has no insurance or not enough of it. Illinois policies must include UM at least at the minimum bodily injury limits of $25,000 per person and $50,000 per accident. UIM is not automatic: it has to be included in an amount equal to the UM coverage in your policy only where that UM coverage exceeds the state minimums (215 ILCS 5/143a-2). You may also add Uninsured Motorist Property Damage (UMPD), which pays for damage to your vehicle when the identified at-fault driver is uninsured.
One step matters more than any other here. Before you accept a settlement from the at-fault driver’s liability insurer, give your own UM/UIM carrier written notice in advance. The statute lets your carrier keep its subrogation rights unless it received that advance notice of the tentative settlement and then failed to advance you a matching payment within 30 days (215 ILCS 5/143a-2), so signing a release first is one of the most common ways a good underinsured motorist claim quietly dies.
Optional Coverages for an Additional Premium
In addition to Illinois’ required auto insurance and the coverages your lender may require, drivers may add custom coverages to their policy for an extra premium. Below is an overview of these optional insurances:
- Accidental Death Benefit, a life insurance benefit in the case of an auto accident
- Custom/Non-factory Equipment, coverage for custom equipment in conversion vans added to the vehicle after it left the factory, e.g., tape decks, CD players, cellphones
- Gap Coverage for Leased or Financed Vehicles, which covers the difference you owe on your lease or loan and your vehicle’s actual cash value (see below)
- Medical Payments, which insures you or your passengers in an accident in your car, even if you are the at-fault driver, and also covers you and your family members in another automobile or while walking
- Physical Damage/Repair/Replace Coverage, which will pay for a new vehicle when repairs to your vehicle cost more than a new car
- Rental Reimbursement, which provides a specific amount for car rental while yours is being repaired for covered damages (see below)
- Towing, which covers towing costs for your disabled car to a repair shop
- Uninsured Motorist Property Damage (UMPD), which will pay for damage to your vehicle when the identified at-fault driver is uninsured
If you plan to add any of this coverage, make sure you have the extra budget for the added premiums. Keep in mind that the cost of premiums may be affected by factors like your age, marital status, and type of automobile.
Gap Coverage for Leased or Financed Vehicles
Gap Coverage for Leased or Financed Vehicles, also known as a Loan/Lease Gap, is meant to be added to your Physical Damage Coverages. It pays for the difference between your vehicle’s actual value at the time of the accident and the amount you still owe on the vehicle. Collision and comprehensive coverages will only pay your automobile’s depreciated value, and according to the Insurance Information Institute, most vehicles depreciate by 20% of their original value in the first year of use. That depreciation can leave a gap between what your Physical Damage insurance pays and what you still owe, and that is where Gap Coverage kicks in. Some car dealers offer this coverage, but auto insurance carriers often offer Loan/Lease Gap coverage for a cheaper price, and you may add it to your existing Collision coverage or comprehensive coverage for an additional premium.
Rental Reimbursement
Rental Reimbursement insurance provides a fixed daily amount for car rental while your vehicle is being repaired for covered damages. Typically you can choose your rental service; your insurance carrier may have partner rentals that bill your insurer directly, but otherwise you will usually pay out of pocket and be reimbursed. If you choose a car above your daily rental limit, you will have to pay the difference yourself. Rental Reimbursement coverage is useful for those who need personal transportation while their car is in the shop.
Understanding Your Premium
An insurance premium is the monthly or annual payment an insured pays their insurance company for an auto insurance policy or other coverage. This payment serves as the insurer’s income and keeps your coverage active. In Illinois, liability coverage is required for driving, and having expired insurance can subject you to fines and possible license suspension. Understanding your premium and how it affects your coverage is essential for protecting yourself financially after an accident, and when premium issues or coverage disputes arise, consulting an experienced personal injury attorney can help clarify your rights and available benefits.
Penalties for Driving Without Insurance
Operating a vehicle without insurance in Illinois carries a fine in excess of $500 but not more than $1,000 for a first offense, and a third or subsequent offense is a business offense carrying a $1,000 fine (625 ILCS 5/3-707). A conviction also suspends your driver’s license for three months, and the license is not reinstated until you pay a $100 reinstatement fee. First-time offenders get one break: produce satisfactory evidence in court that the vehicle was insured at the time, and the disposition can be $100 and court supervision. The Secretary of State can separately suspend the vehicle’s registration for noninsurance, and driving on a registration suspended for that reason is its own offense with a fine of $1,000 to $2,000 (625 ILCS 5/3-708).
Who Needs Auto Insurance?
In 2018, the Illinois Department of Transportation (IDOT) reported a total of 1,035 traffic-related fatalities. While the IDOT saw a decrease in 2019 with 965 fatalities statewide, road safety remains a persistent concern. Illinois follows a fault-based system, meaning a driver found at fault for an accident pays for the damages incurred. Following Illinois statutes, a person involved in a car accident may claim damages in one of three ways:
- By pursuing legal action against the at-fault driver in civil court
- By filing a third-party claim directly against the driver’s insurance company
- By filing claims from their personal insurance carriers
Even careful drivers can be caught in an accident in the blink of an eye. Carrying auto insurance ensures financial coverage for potential fender benders and more serious mishaps, and saves you from the fine for operating without insurance in Illinois.
Helpful Tips When Shopping for Insurance
Auto insurance premiums can get expensive. And while Illinois drivers are required to be insured, a smarter purchase helps you get quality coverage at the best price. Here are six tips to help you make an informed decision:
- Know your insurance requirements. Under the Illinois Mandatory Insurance Law, an at-fault motorist’s insurance must cover at least $25,000 for bodily injury or the death of one person, or $50,000 for bodily injury or death of two or more persons. The insurance must also cover at least $20,000 worth of property damage. Uninsured Motorist (UM) coverage is required at those same bodily injury minimums, and Underinsured Motorist (UIM) coverage has to match your UM limits once you buy UM above the state minimum (215 ILCS 5/143a-2).
- Explore your options. Get brochures and quotes from several well-established insurers for comparison. Two key considerations are the coverage you need and the cost of the premium. Don’t fall for the first policy offered to you, or anything that sounds too good to be true.
- Choose a financially sound carrier. You may buy directly from a company or through an agent, but background-check your potential carrier first. The Illinois Department of Insurance features an Illinois Insurance Company Information page where you can research your top picks.
- Don’t be afraid to ask questions. The most important part of your purchase is understanding what you are signing up for. Clarify computations and vague conditions, and before signing anything, read the “Declarations” page of the policy, which should discuss the type of coverage you are getting and its limitations.
- Provide accurate information. When signing your contract, give truthful information, because your carrier may terminate the contract if they find falsified information. The Illinois Insurance Claims Fraud Prevention Act covers auto insurance cases.
- Keep your information updated. Contact your insurance company at least once a year to check the adequacy of your policy. If you change carriers, cancel the existing one before purchasing a new one.
Keeping these tips in mind should help you get the best auto insurance even on a budget. Remember that your type of car, ownership, and even traffic tickets or moving violations may affect your policy, and your initial quote may change after the company checks your driving record with the Illinois Secretary of State.
Take the Highest Deductible You Can Afford
Another way to lower your premium is to take the highest deductible you can afford. A deductible is a certain amount you pay before your insurance kicks in. Take this option if you are financially capable of covering the deductible every time you have a claim. While it lowers your premium, it is risky unless you are prepared to pay the deductibles, so weigh it against your other options for a cheaper premium.
Your Duties Following an Auto Insurance Loss
In the event of an auto accident, you must take certain measures to ensure your compensation from your auto insurance company comes through. Your duties following an auto insurance loss are as follows:
- Immediately notify your insurance carrier about the accident.
- Immediately report a suspected case of vandalism or theft to the police. Your insurer may reject your claim if you fail to do so.
- Prevent further damage to your vehicle. If your vehicle sustains further damage not resulting from the accident, your insurer may refuse to cover it.
- You may have to submit a sworn proof of loss to your insurance carrier within 91 days. Most policies require this document, which contains the date of loss, events that transpired, and the purpose of vehicle use at the time. Failure to submit it may result in your claim being denied.
- Cooperate with your insurer. Your insurer may require you to submit to an examination under oath and show them the damaged property. Failure to comply may result in the denial of your claim.
- Review the terms and conditions of your policy for other possible requirements.
Talk to 844-SEE-MIKE
If you have questions about your auto insurance coverage or you were injured in a crash, Contact 844-SEE-MIKE anytime for a free, no-pressure consultation. Our personal injury contingency fee is always one-third and we never raise it during your case, we handle your property damage claim at no charge, and you pay nothing unless we recover money for you. You can also email CaseEval@844seemike.com.
