In Chicago, there is no shortage of auto insurance companies vying for your business. And the range of coverage options available for purchase can be just as voluminous. For people who have been in a serious car accident, it can often be confusing navigating the at fault parties’ (commonly referred to as the third party liable’s) coverage. Coupled with a serious injury, receiving compensation for medical bills, time off of work, pain and suffering and vehicle repairs is not always straightforward when policy limits, underinsured motorist coverage and deductibles come into play. This post attempts to provide the thirty thousand foot overview as to what types of coverage are required in a basic Illinois auto insurance policy and what kind of protection these coverage’s provide.
All vehicles that are operated or registered in Illinois must carry auto insurance. 625 ILCS 5/7-601. While there are many options as to how much insurance a policy holder receives, three essential types of coverage are required in all policies.
Property Damage: Under Illinois law, all auto insurance policies must carry a minimum of $20,000 worth of property damage coverage. 625 ILCS 5/7-203. These minimum coverage requirements were recently increased from the previous minimum of $10,000 and apply to all policies issued or renewed after January 1, 2015. Property damage coverage covers repairs to the policyholder’s vehicle and/or the vehicle or property of another individual if the policyholder is found at fault for an accident. This coverage often contains a deductible. A deductible is a fixed fee the insured must pay for repairs before the property damage coverage kicks in. The policyholder is generally not responsible for paying the deductible if they are not at fault for the accident. While $20,000 is the bare minimum coverage required under the law, it is advisable to carry additional coverage amounts, as a major accident involving multiple vehicles or major damage to property may not cover the entire cost of repairs. This can leave many of the victims of the accident without adequate compensation to pay for repairs or, in some cases, the at fault driver personally liable for damages in excess of the policyholder’s limited coverage.
Bodily Injury: Under Illinois law all auto insurance policies must carry a minimum of $25,000 of bodily injury coverage for accidents causing injury or death to one person and a minimum of $50,000 of bodily injury coverage for accidents causing injury or death to two or more people. 625 ILCS 5/7-203. These minimum coverage requirements were recently increased from the previous minimum of $20,000/40,000 respectively and now apply to all policies issued or renewed after January 1, 2015. Bodily injury coverage is used to pay for medical bills, lost wages, future medical care, disability or disfigurement, pain and suffering and many other expenses resulting from an injury in an car accident. Similar to property damage coverage, it is also advisable to carry insurance well in excess of these minimums as a major accident can result in serious injuries such as broken bones, head trauma, paralysis or even death. The resulting medical bills and other damages in these serious crashes can be in the millions of dollars.
Uninsured/Underinsured Motorist: The purpose of uninsured or underinsured motorist coverage is to protect the policyholder in the event that they are the victim of an accident and the person found at fault does not have adequate coverage to pay for all of the victim’s expenses and damages. This coverage is often triggered following a major accident where the at fault party fails to have insurance or only carries the minimum coverage outlined above. Under Illinois law, a policyholder is required to carry this coverage with the same minimums as bodily injury coverage. Uninsured motorist coverage covers the insured’s expenses, up to their own policy limits, if the insured is the victim of an accident involving an uninsured driver or a hit and run. Underinsured motorist cover coverage will pay the difference between policyholder’s coverage and the at fault drivers coverage. Use of this coverage generally does not increase the policyholder’s premiums or add points to their license, as the insured is not the person at fault for the accident.
In serious accidents, many drivers carry insurance with policy limits that do not adequately cover damages resulting from a serious accident and injury. Therefore, it is always advisable to carry extra coverage or even an umbrella policy to ensure that everyone is protected in unfortunate event of a serious accident.