Liability coverage, full coverage, comprehensive coverage, gap coverage — there are so many different kinds of car insurance, it can be a challenge to determine what’s legally necessary, what’s adequate, and what’s ideal for you. The most common types of car insurance are liability coverage and full coverage. Learn which one is best for your situation and the average costs for a variety of insurance policies for Illinois drivers.
What Is Liability Coverage?
Liability car insurance covers the cost of damage or injury you might cause when driving, up to a certain dollar amount. Most liability policies cover the potential cost of medical bills in addition to car repair. The majority of states have minimum liability insurance coverage requirements for all drivers that should include coverage for injury of a single person, coverage for injury to multiple people, and coverage for property damage. States that have legal car insurance policy requirements often carry steep fines for those who don’t purchase the necessary insurance. In Illinois, the required car insurance minimums are:
- $25,000 for the injury or death of one person.
- $50,000 for the injury or death of more than one person.
- $20,000 for damage to property.
It’s important to note that liability insurance only covers other drivers, passengers, and vehicles involved in an accident — it doesn’t cover any injuries or damage you might incur to yourself, your passengers, or your vehicle.
What Is Full Coverage Insurance?
Full coverage insurance is the common term used to refer to two separate types of car insurance — collision insurance and comprehensive insurance. Unlike liability insurance, both collision and comprehensive insurance exist for your financial protection in the event of an accident while driving or other damage to your vehicle, regardless of who was at fault. Both collision and comprehensive insurance policies cover only vehicle damage and do not cover any medical expenses acquired by you or your passengers.
Collision insurance covers damage incurred while driving. For example, if you’re in a car accident or hit a tree while driving, collision insurance would cover your vehicle damage. Comprehensive insurance covers vehicle damage unrelated to driving. For example, if a tree falls on your car during a storm, comprehensive insurance would cover repair costs rather than collision insurance.
In most cases, full coverage insurance is more expensive than liability insurance alone. However, it’s not required by most states like liability insurance is.
Is It Worth Having Full Coverage Insurance?
Deciding to purchase a full coverage insurance policy depends on a variety of factors like how frequently you drive, where you drive, who rides with you, and the vehicle you drive. The main deciding component for many people regarding whether or not to purchase full coverage insurance is the age and condition of their car.
If you have an older vehicle or one that’s in poor condition, it might not be worth the expense to maintain a full coverage policy. Since vehicles lose their value as they age or fall into disrepair, you could end up spending more maintaining your full coverage insurance policy than you would ever receive back from the insurance company in the event of vehicle damage from an accident or other scenario.
The general rule of thumb to help you determine if you should purchase full coverage insurance is to compare the annual cost of full coverage insurance to the value of the vehicle. If the insurance policy costs more than 10% of the total value of your vehicle, it might not be worth maintaining the policy.
Remember, full coverage doesn’t cover any medical expenses — it only covers damage to your vehicle. That’s another consideration to keep in mind when deciding what types of additional coverage make sense to add to your necessary liability policy.
How Much Cheaper Is Liability Insurance?
The difference in price between a liability insurance policy and a full insurance policy depends on a multitude of factors such as:
- Your age.
- Your sex.
- Your driving history, including the number of accidents or driving-related arrests.
- The type of vehicle you’re insuring.
- Your credit score.
- Your marital status.
All of these factors contribute to determining a unique policy price for you and your vehicle. In the state of Illinois, the average costs for various types and combinations of car insurance are:
- State minimum liability-only coverage: $422 per year.
- State minimum liability coverage plus $1,000 deductible comprehensive and collision coverage: $936 per year.
- State minimum liability coverage plus $500 deductible comprehensive and collision coverage: $1,057 per year.
Are There Other Types of Car Insurance?
You can add additional types of car insurance to your policy to meet your specific needs. A few of the most common additional car insurance inclusions are:
- Personal injury protection: This car insurance policy covers any medical bills you or your passengers might incur as the result of an accident.
- Uninsured or underinsured driver protection: This add-on to your car insurance policy protects you if you’re in an accident or involved in a hit-and-run with someone who doesn’t have any car insurance or doesn’t have sufficient car insurance to cover the extent of your vehicle’s damage and your injuries.
- Gap insurance: This type of policy pays the difference between what you owe on your car loan or lease agreement in the event you total your car.
- Rental reimbursement: This insurance policy add-on provides a certain amount of money per day to use toward a rental car while your vehicle is receiving repairs in the body shop.
- Property damage liability: This type of coverage provides protection if you damage someone else’s property with your vehicle.
- SR22: This insurance documentation is required for some high-risk drivers, often those whose driver’s licenses have been suspended or revoked. Maintaining an SR22 policy is necessary in the state of Illinois to reinstate your driver’s license.
Car insurance doesn’t have to be so confusing. With a little education and the support of a knowledgeable and trustworthy insurance company, you can get the perfect level of vehicle coverage for you at a price that works with your budget.