Illinois Car Accidents: How Much Auto Insurance Coverage Do You Need?
After a car accident in Illinois, legally your case is nominally against the at-fault driver, or "tortfeasor." But in reality, it is against his insurance carrier.
Thus, it is absolutely essential that YOU HAVE THE MOST INSURANCE COVERAGE POSSIBLE. Why? Because in Illinois, the minimum auto insurance coverage is $25,000 per person per incident and $50,000 per incident total. Many drivers have only this minimal coverage, which is almost never enough to pay medical bills and other losses after a serious car accident.
What are Underinsured Motorist Coverage (UIM) and Uninsured Motorist Coverage (UM): And Why Do You Need It?
Based on the minimum auto policy coverage amounts in Illinois, if you are struck from behind by a minimally insured driver, sustain a serious back injury, undergo surgery, and cannot work for 4 months, you may be limited to a mere $25,000 in recovery unless your insurance has higher levels of coverage for liability and underinsured motorist coverage (UIM).
By the same token, if the other driver had no insurance, had expired insurance, or had insurance that wouldn't cover this incident (say he was driving for commercial purposes or was using a car that wasn't on the policy and which he was not permitted to drive), you would be completely out of luck unless you had good insurance coverage that contained uninsured motorist coverage (UM).
All auto policies in Illinois will have coverage limits for Uninsured (UM) and Underinsured (UIM) that are at least equal to the limits on your liability policy. Thus, if you have a policy with $250,000 per person liability and $500,000 per incident, you would have those figures to recover as your upper limit if you were involved in a collision with an underinsured or uninsured person.
How does this work? Using the example from before, you are involved in the serious crash with the driver who has the minimal policy of $25,000. It is a safe bet that you will be able to recover the policy limits from the other driver (assuming he is at fault and you had a lawyer representing you). But now, instead of only being able to recover $25,000, you could have as much as $250,000 plus $25,000 ($225,000) to recover for your medical damages, future medical damages, pain and suffering, loss of a normal life, and lost wages.
If you were involved in the same crash with an uninsured driver, your claim would be against your own insurance carrier for up to the full $250,000 policy.
Choosing the Right Insurance Company and Auto Insurance Policy
Insurance is confusing, so make sure you really know what you are purchasing. Don't just buy whatever is cheapest or whoever's commercials you like best. Research the companies online and look at their ratings for paying claims, customer satisfaction, and insurance industry ratings.
Some other things to make sure you have in the event you are involved in a car crash:
- Medical payments (PIP) coverage. Most insurance policies offer a monetary limit on medical bills they will pay for all medical bills incurred as a result of an auto (and often bicycle) crash. The low limits of these are usually $1,000 (not enough to even pay an ambulance bill, let alone the hospital bills) to as much as $10,000. It is possible to go higher, but the cost is usually significantly higher.
- Rental Car Coverage. If your vehicle is damaged or totaled, you will need a car to drive while yours is repaired or while you are looking for a new one. Examine what limits are in place in your policy.
- Gap or Agreed Upon Value coverage. If your vehicle is declared a total loss, the insurance carrier (yours or theirs) must pay you the Fair Market Value (FMV) less depreciation, plus any scrap value. They do NOT have to pay your car loan. That's right, you may actually be left with a car loan for a destroyed car if you don't have either Gap coverage (pays off the "gap" between your vehicle's value and the amount you owe) or Agreed Upon Value (which sets a specific value of your vehicle, usually significantly higher than the FMV). While these coverages are costly, they are well worth their cost in the long run.
Other things to be sure of before it is too late is whether your use of the insured vehicle is covered. For example, if you travel for work as a salesperson, is that covered under your auto policy, or is it considered commercial use, which is not covered by most policies? Does your Medical Payments Coverage (PIP) cover you if you are involved in a crash that is out of state?
One more thing to worry about. Most health insurance carriers exclude paying for medical treatment that is a result of a third party's fault (i.e. a car crash). If you incur bills due to being injured in a car crash, that makes it really important that you have a high limit of Medical Payments (PIP) coverage. Otherwise, you could wind up holding the bag for medical bills that your health insurer won't pay.