Auto Insurance 101: What to Know About Insuring Your Vehicle

If you drive anywhere in the Midwest, there’s a lot to know about what insurance will best cover your needs. Sorting through all the options can get overwhelming, leading some people to delay getting insurance. However, every driver must be insured – for a number of reasons. Getting clear on the basics will help you get clear on your options.

Once you have proper coverage, it’s also important to know when your coverage might kick in. Understanding the basics will remove some of the stress around insurance and help you tap into your coverage should you ever need it.

Do You Have to Carry Liability Insurance & Other Auto Insurance in Illinois?

Certain types of car insurance are mandatory. Others are optional. The first thing you should know is that it is generally illegal to operate, register, or maintain the registration of a motor vehicle without liability insurance. Policies must offer a certain amount of uninsured motorist (UM) and underinsured motorist (UIM) bodily injury coverage. However, you can opt to buy a higher UM and UIM limit to cover claims that surpass the minimal coverage.

What Types of Coverage Should You Get?

Automobile insurance policies typically offer a number of types of coverage. For example, liability coverage to protect against financial losses incurred due to an accident caused by the policyholder’s negligence while operating a vehicle. This generally includes:

  • Bodily injury coverage to cover associated costs with injuries or death to another person in the accident
  • Property damage coverage for the damage of someone else’s car or property, such as a fence, building, sign, or tree.
  • For an extra cost, physical damage coverage for one’s own vehicle can be purchased, which is divided into two types:
  • Collision coverage for damage caused by colliding with another car or object
  • Comprehensive coverage for damage resulting from events other than collisions, such as hail, vandalism, or theft.
  • Finally, medical payments coverage allows for medical or funeral costs if you or any passenger in your car are injured or killed in an accident, regardless of fault.

Because there are so many types – as well as reasons to have them – speak to an agent to be sure you’re getting the right coverage for your needs.

How Much Insurance Should You have?

Your “Declarations” page should list all of the types of coverage you have purchased and their respective limits. It is a good idea to have a conversation with your insurance agent to make sure you have an adequate amount of coverage and to review your policy at least once a year. It is recommended to have liability limits that are sufficient to protect your finances in the event of a lawsuit.

According to the Illinois State Bar Association, an “umbrella” policy is a wise consideration to provide extra protection in the event of a major accident. Here’s what they say about it:

  1. This type of supplemental insurance provides additional coverage on top of your existing liability limits, usually in increments of one million dollars, for a low premium.
  2. Insufficient liability coverage may leave your personal assets vulnerable to a potential judgment if you are sued.
  3. Your insurance company will not be held responsible for any amount that exceeds the liability limits of your policy.

When it comes to Uninsured Motorist (UM) and Underinsured Motorist (UIM) coverage, it is also recommended that your policy limits cover:

  1. All of your medical costs
  2. Any income lost due to injury-related disability
  3. Compensation for any damages you would have received from the at-fault driver had they had full coverage for all losses.

Take Care of Title, Registration, Plates & Stickers at CFSC Auto Services

There’s a lot to know when shopping for auto insurance. It’s always a good idea to ask enough questions to end up with the right formula for you or your family’s circumstances. Once you’re covered, don’t forget to take care of all your other legal obligations at one of the CFSC Auto Services throughout the Midwest! These include:

  • Title and registration
  • Lost or stolen stickers
  • Sticker renewal
  • License plate transfers

Getting these tasks done properly and on time can help you avoid expensive fines later on!

Skip unnecessary trips to the DMV. When you stop by your nearest CFSC location, we can do the work for you and also help out with your other financial services. Our flexible schedule makes it easy to swing by at your convenience. Check out CFSC Auto Services online to find out more!