There are many options and advertisements for auto insurance. With so many choices, it’s hard to know what you really need. However, an Illinois driver is required to carry auto insurance and certain coverage options may be required by your lender if you still have a loan out on your vehicle.
All the big name auto insurers, like Geico, offer multiple coverage options which can be generalized to six different areas.
- Liability for bodily injury
- Liability for property damage
- Collision
- Medical Payments coverage (MedPay)
- Uninsured Motorist coverage
- Enhancements like Emergency Road Service and Rental Car reimbursement
You are probably familiar with auto insurance terminology, like collision and liability. Other terms for coverage options are basic, full and comprehensive. You may have heard about being offered coverage in your plan for uninsured or underinsured motorists – which under Illinois law is automatically included in your auto insurance plan. But let’s break them down so you know what you are getting in your policy.
Basic Coverage:
In Illinois, basic insurance coverage is required by law on your vehicle in order to drive. The most basic policies will include bodily injury liability, personal injury protection (or medical bill payment), property damage liability, collision, comprehensive and uninsured/underinsured motorist coverage. In Illinois, the bare minimum car insurance required by law for Illinois drivers is 25/50/20 $25,000 bodily injury per person per accident, $50,000 bodily injury for all persons per accident and $20,000 property damage liability, per the Illinois Secretary of State.
Full Coverage:
In Illinois, full auto insurance coverage is not required by law on your vehicle in order to drive. Full coverage is the combination of comprehensive coverage, collision and liability. includes your state’s minimum requirements. Look into what is specifically covered in your full auto plan and do not assume it covers everything you need or want. The word “full” can be misleading.
Comprehensive Coverage:
This insurance is a coverage option reimburses you for damage to your vehicle caused from losses incurred unrelated to a collision, such as theft, weather-related damage, or vandalism. Comprehensive coverage is not required by law, but may be required by your bank if you still have a loan on your vehicle.
Liability Coverage:
Liability insurance is a requirement for all drivers in Illinois. This coverage reimburses damages to person and property on the third party involved in the vehicle accident, and not your own. Because Illinois is not a no-fault state, you will not be made to reimburse the third party for liability if the accident was deemed completely the other person’s fault. If you are at fault, partially, state law regulates you would pay up to the percentage which you are said to be liable. Typically, liability coverage is included in your coverage without you necessarily asking specifically for it and it carries no deductible.
The National Association of Insurance Commissioners (NAIC) explains most liability policies cover bodily injury, property damage and damages you are liable for due to an accident involving an uninsured/underinsured motorist. The NAIC defines liability for bodily injury as covering lost wages, medical bills, rehabilitation expenses, legal fees, court costs, and pain and suffering; and property damage liability covers repair costs and damage to the other party’s car or to their property.
Collision Coverage:
This coverage will reimburse damages to your vehicle regardless of who was at fault in the accident. If you have a loan for your car, the lending bank may require you to carry collision coverage. So it is important to check your purchase agreement from your lender. Collision coverage doesn’t just reimburse damages from vehicle accidents but damage from driving into a stationary object or driving over a pot hole. Most times, collision coverage will carry a separate deductible you must pay before claim reimbursement is made.
Uninsured/Underinsured Coverage:
Illinois law currently requires auto insurance automatically includes uninsured/underinsured motorists coverage. This is a measure taken by Illinois government to protect drivers against this risk, per Illinois General Assembly Insurance Code 215ILCS 5. The code enacts that coverage will match your policy’s reimbursement limits on personal and property liability, whether they are 25/50/20 or 100/300/50.
Medical Payments Coverage:
Essentially having this enhancement in your auto insurance policy can help you pay for medical bills since it will kick in after your health insurance has been maxed to your limit for injury. It also will cover medical expenses if you are hurt in another person’s vehicle that has been in an accident. In addition, it will also pay for funeral expenses of covered drivers and passengers after an accident, regardless of who was at fault.
But What Coverage Limits Should I Get?
The insurance industry recommends a coverage amount is 100/300/50, per the NAIC. What this means is you are covered up to $100,000 per person, $300,000 per incident for bodily injury, and $50,000 for property damage liability coverage. A person can choose lower coverage limits, thus lowering the premium.
Buying the bare minimum is, of course, not recommended since it will obviously leave you high and dry when your coverage runs out after a claim. It’s best to discuss your financial situation and coverage needs and wants with a licensed insurance agent.
