Auto insurance minimum requirements may rise in Illinois

Illinoisans could soon be paying more for their car insurance after the House passed legislation Sunday that raises minimum liability requirements.

“This will save people who are injured in an accident that is no fault of their own from some of the out-of-pocket medical costs they may incur,” said the bill’s sponsor, Rep. Laura Fine, D-Glenview.

The current rates were set 24 years ago, when lawmakers first voted to require all drivers to carry liability insurance, Fine said, adding that those rates have not kept pace with rising medical costs.

With rates going unchanged for more than two decades, Illinois has the lowest minimum coverage in the Midwest and is among the lowest in the nation, Fine said.

Fine said the minimum requirement increase could cost Illinois drivers about $75 more per year. The majority of Illinois drivers already carry above the minimum amount, she said.

The legislation increases minimum coverage to $25,000 — up from $20,000, which was set in 1989, for one person’s injury or death. The minimum for two people’s injury or death would increase to $50,000, up from $40,000. For property damage, the minimum coverage would increase to $20,000, up from $15,000.

Before lawmakers passed the measure by a 70-41 margin, Republican lawmakers like Rep. David Reis, R-Olney, argued raising the minimum requirement only means higher premiums for those who carry just minimum coverage.

“You know, we have a lot of problems with people driving uninsured anyway,” Reis said. “All we’re doing is making it harder for people to buy insurance and afford this insurance. If they choose to raise their minimum liability, they can do so, but we’re forcing everyone to do that with this bill.”

Rep. Mike Bost, R-Murphysboro, echoed Reis, saying he sees more people who can hardly afford the current rates opting out entirely with the increases.

“My fear is that by increasing this, those who are at the bottom are just going to fall away and throw their hands up and say ‘You know what, I’m just going to take the chance of getting a ticket’ and be totally uninsured. And that’s a scary thought,” Bost said. “Some are just poor and they’ve got to make a choice on whether insuring their car or providing for other needs for their families or themselves.”

With higher minimum liability requirements, policy holders in Illinois could be paying less overall. The portion of insurance coverage paid to help cover the costs of uninsured or underinsured will go down because companies will have fewer underinsured losses, Fine said.

The legislation passed the Senate 45-9 earlier this month and now heads to the governor’s desk.