Required Auto Insurance Coverages
Other Coverages That May Be Required Optional Coverages For Additional Premium Auto Insurance Pricing Auto Insurance Rating Factors Discounts That May Be Available Ways To Lower Your Auto Insurance Costs Getting Auto Insurance Price Quotes Other Factors To Consider When Choosing A Company If You Can't Find Auto Insurance How To Contact The Illinois Department Of Insurance Auto Insurance Complaint Ratios (Press Release) Required Auto Insurance Coverages Illinois-issued auto policies are required to include the following: Liability Insurance - pays for bodily injury to another person or property damage you cause due to the negligent operation of a vehicle. It may also pay if the accident was caused by a member of your family living with you or a person using your vehicle with your permission. It does not pay for your bodily injury or damage to your vehicle. Currently, Illinois requires liability insurance limits of $20,000 to any one person for bodily injury, $40,000 total for all bodily injuries resulting from the accident and 5,000 total for property damage, excluding your own vehicle. You should consider buying higher limits because the minimums may not be enough to fully protect you from lawsuits. Uninsured Motorist Bodily Injury Coverage (UM) - covers you for your bodily injury caused by a hit-and-run driver or an at-fault driver who has no auto liability insurance. Currently, Illinois law requires uninsured motorist limits of $20,000 per person and $40,000 per accident. For additional premium, you may buy higher limits to pay for claims that exceed these amounts. Other Coverages That May Be Required Underinsured Motorist Bodily Injury Insurance (UIM) - pays the difference between your UIM limits and the liability limits of the at-fault driver, if lower than your UIM limits. This coverage is required by law if you purchase higher limits of uninsured motorist bodily injury coverage (UM). Medical Payments - covers medical and funeral expenses for you or your passengers if injured or killed in an accident in your vehicle. Also covers you and your family members if struck by a vehicle while walking or riding in another vehicle. This coverage pays even if you cause the accident. Medical payments coverage may be required by your auto insurance company. Physical Damage Insurance - contains two separate types of insurance: Collision Coverage - pays for physical damage to your vehicle if it collides with another object; Comprehensive Coverage - pays for damage to your vehicle from most other causes, such as theft, fire, hail etc. This coverage may be required by your lender if you have a loan on your vehicle. Optional Coverages For Additional Premium In addition to required coverages, you can also buy optional coverages for extra premium. Uninsured Motorist Property Damage Insurance (UMPD) - covers damage to your vehicle caused by an identified, at-fault, uninsured driver. This option is only offered if you choose not to purchase collision coverage. Towing Coverage - pays a portion of the costs to tow your disabled vehicle to a repair shop. Rental Reimbursement Coverage - pays a specific amount per day (e.g. 5) for you to rent a vehicle while your vehicle is being repaired due to a covered loss. Custom/Non-factory Equipment Coverage - covers customized features such as those found on conversion vans, as well as specific non-factory items such as tape decks, cellular phones or CB radios. Auto Insurance Pricing Rating factors govern what you pay for auto insurance. Rating factors are characteristics about you that place you in a group of drivers with similar risk-related characteristics. Companies set a rate for each group based on the claims paid for the people in that group. The higher the losses for a specific group, the higher the rates for that group. Some rating factors are completely beyond your control (e.g. age and gender). Some are difficult to control due to lifestyle choices (e.g. residence location and vehicle usage). Other rating factors are completely within your control (e.g. driving record and type of vehicle insured). Auto Insurance Rating Factors These rating factors will affect the price you pay for auto insurance: Driving Record - claims and traffic violations for the past 3 - 5 years for any driver who will be covered by the policy. Drivers with previous claims or violations may pay higher premiums than those with good driving records. Age, Sex and Marital Status - statistics show that males still have more accidents than females, teenagers are more likely to have accidents than adults and single people have more accidents than married people. The higher the risk, the higher the premiums. Location - since heavily populated cities have more traffic, thefts and vandalism, drivers in these areas may pay higher premiums than groups in rural areas. Type of Vehicle and Vehicle Use - some vehicles cost more to insure because of higher claims frequency and/or higher repair costs. Discounts That May Be Available Multiple Vehicles - given when all vehicles in your household are insured by the same company. Defensive Driver - given to drivers over age 55 who have passed an approved defensive driving course. Safety Devices - given for items such as air bags, automatic seat belts and anti-lock brakes. Anti-theft Devices - given on your comprehensive coverage for devices that deter theft or vandalism. Good Student - given for young drivers who maintain a B average or better. Good Driver - given to policyholders who maintain good driving records. Auto/Home Packages - given if you buy your auto and homeowners policies from the same company. Ways To Lower Your Auto Insurance Costs Maintain a Good Driving Record - moving violations and accidents usually result in higher premiums. Be a law-abiding and defensive driver. Take the Highest Deductible You Can Afford - insurance is meant to protect you from the financial consequences of major losses. By raising your deductibles, you may be able to significantly lower the price for physical damage coverage, but you will pay more out of pocket each time you have a claim. Choose Your Vehicle Carefully - some vehicles are more costly to insure than others. Contact your agent or company before you make a final decision. Consider the Age/Condition of Your Vehicle - physical damage coverages may not be cost efficient for older vehicles. If you do not have a loan on the vehicle, you may want to consider dropping these coverages. Ask About Discounts - the type and amount of discounts offered vary by company. Getting Auto Insurance Price Quotes Auto insurance is a major expense. You should shop around for the best product at the best price. However, if you have established a long-term, claims-free record with a company, you may want to consider that relationship before switching to another company whose rates are lower. When comparing prices among companies, be sure to compare the same coverages, and ask about the types and amounts of discounts offered. A rate quote from an insurance agent is only an estimate of what the insurance will cost. If the agent quotes the premium incorrectly, the correct amount figured by the insurance company is the price you will actually be required to pay. Therefore, before you switch, ask the new agent to submit a non-bound application for you. With a non-bound application, there is no coverage and you pay no money. The agent submits the application to the company and the company will advise whether or not you will be accepted and at what price. This way, you can be sure of the price and whether you are accepted by the new company before you cancel your current policy. Other Factors To Consider When Choosing A Company In addition to price, there are other factors to consider when buying insurance or changing insurance companies. Service -- Some companies sell through local agents and some through direct marketing or group plans. If the ability to discuss problems or questions with someone you know is important to you, you should find out whether the company services its policyholders through local agents, or through its regional or home office. Licensing Status -- Insurance companies that are not licensed to do business in Illinois are not required to comply with insurance laws or participate in the Insurance Guaranty Fund which protects policyholders if a company goes bankrupt. of the insurance companies listed in the Auto Insurance Premium Comparision program are properly licensed in Illinois. Complaints -- The Department of Insurance tabulates consumer complaint ratios for Illinois licensed auto insurance companies registering ten or more complaints. To obtain these ratios, you may call the Department of Insurance in Springfield at (217) 782-4515 or in Chicago at (312) 814-2427. Financial Stability -- Financial stability helps ensure that a company can pay its claims. Listed below are several independent organizations that rate the financial stability of insurance companies. Each organization has its own criteria and may charge a fee for its services. Your public library may also have published ratings from these sources. A.M. Best Company Moody's Investor Services -- 212-553-0377 Standard & Poor's Insurance Rating Services -- 212-208-1527 Weiss Ratings, Inc. -- 800-289-9222 If You Can't Find Auto Insurance If you cannot find auto insurance through normal insurance markets, because of your driving record or the type of vehicle you own, talk to your insurance agent about the Illinois Automobile Insurance Plan. The premiums may be higher than premiums of companies in the normal insurance markets. However, if you maintain a good driving record while in the Plan, you should be able to eventually return to a standard company. The Plan will insure you if you have a valid drivers license, do not owe unpaid premiums and your vehicle is safe to drive. How To Contact The Illinois Department Of Insurance If you have a question about a claim or your specific insurance policy, please call your insurance agent or insurance company. If you want to know whether an insurance agent or company is acting in accordance with Illinois insurance laws, or just have a general question about insurance, you may contact the Illinois Department of Insurance at one of the following locations:
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