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August 14, 2020

Understanding Illinois Car Insurance Requirements

a woman riding on the back of a car


By law, all Illinois drivers must carry certain amounts of auto liability insurance. You might be able to get this covers from your own policy, or from a spouse or parent. However, you must have a policy that always applies you as a driver. Here is how the state’s required liability insurance works. 


What are the Illinois car insurance requirements? 


Illinois insurance law makes it an at-fault insurance state. This means that drivers who cause wrecks must pay for the damage they do to others. Liability coverage pays for these losses. It does not pay the policyholder or their passengers. Instead, it might pay other drivers, their passengers, pedestrians or others with property damage.


Since Illinois requires at-fault drivers to pay, almost all drivers need to have liability insurance. Motorists who register a vehicle in Illinois must have at least:


  • $25,000 bodily injury liability (BIL) coverage per person  

  • $50,000 bodily injury liability coverage per accident  

  • $20,000 property damage liability (PDL) coverage per accident 


Often, your liability policy will apply not only to you as the policyholder, but also family members or others who have permission to use your car. So, if your spouse or a friend who borrows your car causes a wreck, then it is your liability policy that pays. Some policies will require you to list household members as extra insured parties on the policy, however.


How does liability insurance work? 


Each portion of your liability coverage will pay in a different way. Let’s look at a scenario where you have the minimum $25/$50/$20 liability insurance on your policy. 


In this scenario, you accidentally hit the back of another car when trying to stop at a stoplight. As a result, the accident is your fault. The other vehicle has $10,000 in damage. The driver sustains $5,000 in medical bills and their passenger sustains $1,000. 

  • Because you have $20,000 in property damage liability coverage, your PDL insurance will cover the $10,000 for the other vehicle’s repairs.  

  • The accident injured two people, so your BIL coverage will pay up to $25,000 for each person’s injuries. However, it will not pay more than $50,000 for all their injury costs combined.


Had the other car sustained more than $20,000 in damage, then you might have had to pay out of pocket for remaining costs. Had one person sustained more than $25,000 in injury costs, or had both people sustained more than $50,000 in costs, then you might have to pay the remainder as well. You naturally want to avoid these scenarios when possible. As a result, it’s a good idea to always carry more liability insurance than required by law.


The more you have, the lower your cost burden after accidents. 

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