Illinois law mandates auto insurance coverage
Illinois law states that no person can operate, register or maintain registration of a vehicle, nor let another person operate that vehicle, without a liability insurance policy. Furthermore, the law requires you to have this proof of insurance within the vehicle. Violation of this provision may result in significant financial penalties and even the loss of driving privileges.
The liability coverage in your policy does two things for you. First, your insurance company will hire and pay for a lawyer to defend you in a claim or lawsuit arising out of an accident. Second, the company will, up to the policy limits, pay for property damage and injuries to others caused by your negligent operation of a vehicle.
If you claim that the other driver was at fault and should pay for your injuries and damage to your vehicle, you will need to decide whether to accept a settlement from the at-fault driver’s insurance company. If you do, you waive your rights to have a jury determine the value of the case. The at-fault party and their insurance company will want you to sign a “Release” to indicate the terms of the agreement. By signing it, you agree to give up any further claims against the party. Before making the decision, you may want to consult with an attorney.
If you are at fault, and the claim against you exceeds the amount of your liability limits, you would have to pay the excess amount. If you do not have sufficient funds, you may be forced to liquidate assets and perhaps be subject to garnishment of your wages.
The insurance limits required are not less than $20,000 for bodily injury to or death of one person and not less than $40,000 because of bodily injury to or death of two or more persons in any one motor vehicle accident. A liability coverage limit of not less than $15,000 for injury to or destruction of property is also required.
The “Declarations” page of your policy describes the types of coverage you have and the limits for each. You and your insurance agent should discuss your needs in order to determine the appropriate amount of coverage, and you should talk to your agent on an annual basis to make sure that the coverage you have is adequate.
Generally, your liability limits should be sufficient to protect your assets and income against collection. It is also advisable to purchase an “Umbrella” policy to protect you if you are at fault in a catastrophic collision. These policies are a type of supplemental insurance that increases normal liability limits to a higher amount. Typically, they are sold in increments of one million dollars for a relatively small additional premium.
Keep in mind that the less liability coverage you have, the more likely it will be that your personal assets could be exposed to a judgment for monetary damages. Your insurance company is not obligated to satisfy the amount of any judgment over the liability limits of your policy.
A minimum level of coverage for uninsured motorist and underinsured motorist is also required by Illinois law, and you may choose to have high levels of this coverage in case you are involved in an accident where the other driver is not able to compensate you for damages to your vehicle or for injuries sustained by you or others in your vehicle. This coverage should be sufficient to replace or supplement your income if you cannot work, and it should pay you for the damages you would have collected from an at-fault driver.
Note: This information was prepared as a public service by the Illinois State Bar Association and is a joint project with the Illinois Press Association. Its purpose is to inform citizens of their legal rights and obligations.
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If you have questions about the application of the law in a particular case, consult your lawyer. The law is constantly changing. Information on this site or any site to which we link does not constitute legal advice.