Illinois rejects increase in auto insurance minimums

Crawford Frazer

In February 2011, the Illinois House Insurance Committee shot down a measure that would have significantly raised the statewide minimum auto insurance requirements. The new limits would have increased as follows:

  • Individual death and injury liability minimum -- from $20,000 to $100,000.
  • Minimum limits for multiple accident victims -- from $40,000 to $300,000.
  • Property damage limits -- from $15,000 to $100,000.

The issue was certainly contentious. According to the American Insurance Association, Bill 231 was defeated by a 2-to-1 vote in the House Insurance Committee. Both sides had supporters and critics.

The case for higher limits

If an at-fault driver lacks sufficient insurance to pay for damages, a driver who is simply at the wrong place at the wrong time could be left to pay for repairs and medical expenses.

Illinois State Rep. David Leitch introduced the bill because of an Illinois resident whose friend was critically injured in a car accident, according to the State Journal Register. The driver responsible for the crash did not have enough insurance to cover the medical expenses. Abels and Annes PC, a Chicago personal injury law firm, also supported the bill, calling the current liability limits "woefully inadequate" when it comes to covering both the cost of expensive cars and medical care after serious accidents.

The case against higher limits

Although most states do require auto insurance, a 2009 study by the Insurance Research Council indicates that economic factors determine whether a driver actually buys it. According to the study, the uninsured motorist rate rises with the unemployment rate. Those who oppose the bill claim that when insurance limits rise, premiums rise and fewer drivers can afford coverage. This could cause many drivers to simply forgo it altogether.

A number of insurance groups opposed the bill, from national companies like State Farm and Liberty Mutual to state organizations like the Illinois Insurance Association. In a press release, the American Insurance Association applauded the legislation's defeat, saying that raising the limits would cost drivers too much -- and that it made "no sense to provide more insurance coverage for people who don't want it or need it."

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