Illinois Car Insurance Laws: Minimum Coverage, Penalties and SR-22

No one may operate, register or keep registered a motor vehicle in Illinois unless it is covered by a liability insurance policy from an insurer authorized in Illinois, with limits of at least $25,000 for bodily injury or death of one person, $50,000 for two or more people in one crash, and $20,000 for property damage (25/50/20). Policies must also include uninsured motorist coverage (at least the same bodily injury minimums). Exempt vehicles include self-insured vehicles, government vehicles and inoperable or stored vehicles.

Illinois is an at-fault (tort) state: required auto liability insurance covers loss resulting from liability imposed by law for injury, death or property damage the insured causes. The Alabama Department of Insurance's national list places Illinois among the "Tort States."

Uninsured and hit-and-run motorist coverage is mandatory in every Illinois auto liability policy, at least at the state minimum bodily injury limits ($25,000/$50,000). Insurers must include UM coverage equal to the insured's bodily injury liability limits unless the named insured rejects the amount above the state minimum (or selects lower limits) in writing; insurers must give applicants a brief description of the coverage and of this right. The election binds all insureds and carries over to renewals unless the insured later requests more in writing. Underinsured motorist coverage rules are also set out in 215 ILCS 5/143a-2.

Every driver must carry evidence of insurance in the vehicle and hand it to a uniformed law enforcement officer on request. Acceptable evidence includes the insurance card, the declarations page, a binder or premium receipt, a rental agreement, proof of a purchase within 60 days plus the card for the replaced vehicle, registration issued only on proof of insurance, or an electronic image on a phone or other device (showing it does not consent to a search of the device). Insurance cards may be paper or electronic and are valid for no more than 12 months. Failing to show evidence of insurance when asked is treated as operating an uninsured vehicle; knowingly displaying invalid proof is a separate offense.

Driving an uninsured vehicle is a petty offense with a fine over $500 and up to $1,000 (a third or later conviction is a business offense with a $1,000 fine), plus a 3-month suspension of the driver's license, after which a $100 reinstatement fee is required; driving during that suspension adds 6 more months. A first offender who shows current insurance at the court date pays a $100 fine and gets court supervision. No one is convicted who shows the court the vehicle was insured at the time of arrest. Uninsured driving that causes bodily harm is a Class A misdemeanor. After a third or later conviction, the driver must file proof of financial responsibility with the Secretary of State and keep it for at least 3 years.

A person convicted a third or subsequent time of driving uninsured must file proof of financial responsibility (as defined in 625 ILCS 5/7-315) with the Secretary of State and maintain it for at least 3 years after it is first filed; the Secretary suspends the license of anyone who does not provide adequate proof.

After a private passenger auto policy has been in effect 60 days (or if it is a renewal), the insurer may cancel only for listed reasons: nonpayment of premium; material misrepresentation; violation of policy terms; failure to disclose crashes and moving violations from the prior 36 months; a false or fraudulent claim; a household or regular driver's license suspension or revocation in the prior 12 months, certain medical conditions, drug addiction in the prior 36 months, certain convictions in the prior 36 months (felony, DUI, vehicular homicide or assault, leaving the scene, vehicle theft, false license application) or 3 or more moving violations in the prior 12 months; or certain vehicle conditions or uses. Cancellation notices must be mailed at least 30 days before the effective date (10 days for nonpayment) and give a specific explanation of the reasons. Nonrenewal requires at least 30 days' mailed notice with a specific explanation. Under P.A. 104-534 (effective Jan. 1, 2027), the nonrenewal notice period increases to 60 days, and cancellation notices for coverage in effect 61 days or more must be mailed at least 60 days before cancellation (still 10 days for nonpayment).

Illinois allows credit-based insurance scores with limits (Use of Credit Information in Personal Insurance Act): an insurer may not use an insurance score calculated using income, gender, address, ethnic group, religion, marital status or nationality; may not deny, cancel or nonrenew solely on credit information (and must give notice and a chance to explain), or base renewal rates solely on credit; may not penalize a consumer solely for not having a credit card; and must treat an absence of credit history neutrally or as otherwise filed with the Department.

When an insurer pays a total loss claim, the insurer is deemed the owner and the vehicle is salvage; the insurer must send the title, application and fee to the Secretary of State within 20 days and a salvage certificate is issued in its name. The owner may keep the vehicle by agreement with the insurer only if it has hail damage that does not affect operational safety or is 9 model years old or older. Insurers paying a theft total loss need not apply for a salvage certificate unless the vehicle is recovered with damage that would have made it a total loss.

When a vehicle is sold, the seller completes the assignment and warranty of title on the certificate of title at delivery and gives the title to the buyer (or sends it to the Secretary of State). The buyer must, promptly and within 20 days after receiving the vehicle and assigned title, complete the application for a new certificate of title and send it with the title to the Secretary of State.

File a complaint with the Illinois Department of Insurance online through the IDOI Help Center (https://idoihelpcenter.illinois.gov/s/), or email or mail the Auto/Home/Property/Commercial Complaint Form. Offices: 115 S. LaSalle Street, 13th Floor, Chicago, IL 60603, (312) 814-2420; 4800 Wabash Avenue, Springfield, IL 62711, (217) 782-4515.