Illinois Car Insurance Requirements

Like almost every other state, Illinois has passed legislation requiring vehicle owners to carry certain minimum amounts of liability car insurance, in the event that they cause a traffic accident on the state's roads and highways. In this article, we'll explain what the Illinois "mandatory insurance" laws require, and we'll touch on other key details related to auto insurance in Illinois.

Illinois is a "Fault" Car Accident State

Illinois follows a "fault" system when it comes to financial responsibility for injuries, vehicle damage, and other losses stemming from a car accident. This means that the person who was at fault for causing the car accident is responsible for compensating anyone who suffered harm as a result of the crash (although from a practical standpoint it's typically the at-fault driver’s insurance carrier that will cover these losses, up to policy limits).

In Illinois, a person who suffers any kind of injury or damage due to an auto accident usually can proceed in one of three ways:

• by filing a claim with his or her own insurance company, assuming that the loss is covered under the policy (in this situation, the insurance company will likely turn around and pursue a subrogation claim against the at-fault driver’s insurance company)
• by filing a third-party claim directly with the at-fault driver’s insurance carrier, or
• by filing a personal injury lawsuit in civil court against the at-fault driver.

Note: In no-fault car insurance states, claimants don't have this same range of options. If you're injured in a car accident in a no-fault state, you must turn to your own car insurance coverage for the payment of medical bills and other out-of-pocket losses, regardless of who caused the accident. Only if your claim reaches certain statutory thresholds can you step outside of no-fault and make a claim directly against the at-fault driver. But Illinois drivers don't need to worry about no-fault for an in-state accident.

Illinois "Mandatory Insurance" Laws

Under the state's "mandatory insurance law," Illinois requires vehicle owners to carry liability insurance for any vehicle registered in the state. If you're a vehicle owner in Illinois, the minimum coverage you're required to carry is:

• $25,000 for the injury or death of one person in an accident caused by you
• $50,000 total for all injuries or deaths in an accident caused by you, and
• $20,000 for damage to the property of another person in an accident caused by you.

This basic liability coverage pays the medical bills, property damage bills, and other costs of drivers, passengers, and pedestrians who are injured or have their vehicle damaged in a car accident you cause, up to coverage limits. You can (and in some situations should) carry more coverage to protect you in case a serious crash results in significant car accident injuries and vehicle damage. Remember, once policy limits are exhausted, you are personally on the financial hook, so higher insurance limits can help protect your personal assets in the event of a serious crash.

Your liability coverage will kick in if any family member is driving your vehicle, or if you've given someone else permission to use it. It will likely also cover you if you get into an accident in a rental car.

Finally, remember that liability coverage doesn't apply to your own injuries or vehicle damage after a car accident. You'll need different (additional) coverage for that if you're involved in a car accident and no one else's coverage applies to your losses. For example, personal injury protection (PIP) or MedPay coverage can be used to pay your car accident medical bills, and collision coverage can pay for repairs to (or replacement of) your damaged vehicle after a car accident.

Uninsured Motorist Coverage is Automatic in Illinois

In Illinois every liability car insurance policy sold in the state automatically includes uninsured motorist coverage (UIM) with limits equal to the policy's injury liability coverage.

Penalties for Driving Without Car Insurance in Illinois

If you drive a registered vehicle without car insurance in Illinois, you could face a fine of at least $500. And if you're caught operating a vehicle whose registration is under suspension for lack of insurance, the fine will be at least $1,000. Note that these fines will likely pale in comparison to the financial hit you could take if you're in a car accident and you don't have car insurance.