Drivers need to know what they are paying for and what type of coverage they are going to see from auto insurance companies. Hoosiers, especially in northern Indiana, are often driving back and forth to Illinois. While each state requires all of their drivers to have auto insurance, each state has different requirements for drivers and their auto insurance. This could mean possible changes in the future.
Types of Coverage
Drivers need to know what types of coverage auto insurance companies are going to offer. The main types of coverage that are required by the state of Indiana are bodily injury, property damage (which are explained more below), medical bills, and collision. These coverages are to insure that all cars, property, and medical situations are taken care of. Another type of auto insurance coverage drivers could have would be a “comprehensive” coverage policy. This type of policy covers anything that happens to a vehicle other than a collision, such as theft, fire, windstorm, or glass breakage. Other types of coverage offered by certain companies could include towing and car rental insurance.
Property Damage
There have been instances where car accidents happen and there is property damage. The property damage insurance requirement in Illinois is $20,000 minimum, while Indiana's is just $10,000. Hoosiers do not have to pay as much for their coverage because of the lower minimum. Indiana is deciding soon whether or not to raise the property damage minimum to $25,000. There are pros and cons to this decision. A positive point would be that property owners are getting more compensation for any damage inflicted. A negative point would be that Indiana drivers would have to pay more for their auto insurance coverage. The last time the property damage minimum has been raised was in 1982. Since that time, the price of vehicles has grown exponentially. This is an important factor in raising the minimum. Many cars today are worth more than $25,000, so for those driving cars worth above this level might want to increase their auto insurance to cover more than this amount.
Bodily Injury
In Indiana there are also minimums for bodily injury for car accidents. No matter which auto insurance policy someone has, there is a minimum of $25,000 or $50,000 for those who are uninsured. Drivers who are underinsured have a minimum of $50,000. For multiple drivers injured the minimum is $50,000. As a tip, it may be smart to pay for auto insurance above the minimum level, because medical bills can easily exceed $25,000 per person. There is one major difference between the states for avoiding this auto insurance mandate. If an Indiana resident would like to avoid this, they can deposit $40,000 with the state treasury as proof for financial responsibility. Illinois does not have this avoidance choice, which leaves the door open for changes in either state’s policies.
Information for this post was received from the Indiana Department of Insurance and the Illinois Department of Insurance websites. The Indiana and Illinois state auto insurance policies can be seen here:
http://www.in.gov/idoi/2579.htm#5
http://insurance.illinois.gov/AutoInsurance/shopping_auto_ins.asp
