Automobile Insurance - Coverage

The Illinois Safety and Family Financial Responsibility Law governs the basic principles of automobile insurance in Illinois. The law requires that you maintain a minimum amount of liability insurance and that you carry proof of the fact that you are insured. While the law requires that you purchase a minimum amount of insurance, you may buy insurance in any amount above the minimum depending upon what your insurer offers.

Liability Coverage

Your "liability" coverage is insurance you purchase to pay for injuries you may cause to other people by your own negligent driving. Someone you may accidentally injure, or whose car or property you might accidentally damage, can sue you. If successful, he or she would be entitled to receive money from you, which you would obtain from your liability insurance coverage rather than paying it out of your own pocket.

Your liability coverage probably includes a promise from the insurance company to pay for the services of a lawyer of the company's choice to defend you if you are sued. It also includes a specific limit on the amount of money the insurance company must pay if such a lawsuit is decided against you or is settled by the insurance company. This is called a "policy limit" or "liability limit." Once the insurance company has paid up to its liability limit, you are on your own to pay the balance, if any, owed to the person who successfully sued you. You should know the liability limits of your policy and be sure that the coverage you have purchased is suited to your needs.

Medical Expenses

Your policy also provides you with certain coverage for your own injuries. This is usually in the form of coverage for medical expenses. You may obtain coverage for medical expenses in any amount agreed to between you and your insurer. Thus, your coverage would provide for the payment of your medical expenses and usually for the payment of the medical expenses of your spouse, relatives, and any occupant of your vehicle.

Underinsured vs. Uninsured

Your "underinsured motorist" coverage is insurance you purchase from your own insurance company to pay for your losses if you are injured by someone whose liability coverage is not sufficient to pay for all of the injuries you have suffered. Your "uninsured motorist" coverage is insurance you purchase to pay for your losses if you are injured by an uninsured driver or a hit-and-run driver. Both underinsured and uninsured motorist coverage are designed to place you in the same position as you would have been had the driver who caused the accident had adequate insurance.

It is mandatory that you maintain minimal liability coverage of $20,000 for each person you may injure, up to $40,000 for any one accident regardless of the number of persons you injure, and $15,000 for damage to the property of others as a result of any one accident. However, your purchase of underinsured and uninsured motorist coverage is optional. You may have none at all. If you are uncertain whether you actually have underinsured or uninsured motorist insurance coverage, check your automobile insurance policy, or check with your insurance agent. Under the law in Illinois, insurers are required to offer you both underinsured and uninsured motorist coverage in an amount up to your bodily injury liability limits. Insurers must give this information to policyholders in such a way that they may make a well-informed decision about whether to elect or reject underinsured or uninsured coverage.

Since many people purchase minimal liability coverage, and an alarming number of drivers drive without any insurance at all, it is wise to purchase underinsured and uninsured motorist coverage. Some people also purchase an "umbrella" liability policy to increase their liability coverage for both their motor vehicles and their homes in the event that someone is severely injured by their negligence. Review your insurance policy to make sure that you understand the coverage you have purchased and that you are adequately insured.

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