Every state has minimum car insurance requirements (the amount of coverage you need to be legally insured) and generally, you need to have this coverage to drive your car. For example, Illinois requires you have liability insurance in the following minimum amounts:
- $25,000 for injury or death of one person in an accident.
- $50,000 for injury or death of more than one person in an accident. This is not per person – this is the maximum total the insurance company would pay in the event of a loss, regardless of how many people are in the car.
- $20,000 for damage to property of another person
If you are stopped in a traffic violation or involved in an accident, the police may issue you a citation if you are unable to provide evidence of insurance.
However, as with many aspects of life, the lowest requirement does not meet the actual need. For example, in the event of an at-fault accident in which the other party is taken to the hospital by medical flight – the flight alone can cost $15,000 to over $50,000, not including the hospital and other medical bills. Having low limits would most likely leave you responsible for paying many of these medical expenses out of pocket.
You should also consider the cost of other vehicles on the road. In the United States, the average selling price for a new light vehicle came to around 42,380 U.S. dollars in 2021 – significantly more than the state minimum property damage limit of $20,000. If you are found at fault in an accident where the damage to another vehicle exceeds the $20,000 limit you will be responsible for making up the difference. Imagine making car payments on someone else’s car (as well as your own)!
Auto Insurance should not be approached as something you are simply required to have. It is a valuable protection. If you would like to learn more about recommended limits on your car insurance policy, please reach out to one of our knowledgeable agents who can further explain your risk and make recommendations on your coverage needs.