According to the Illinois State Legislature Vehicle Code, all Illinois motorists must carry the minimum liability limits of auto insurance. Illinois is a “fault” state, which means that the company insuring the driver who causes the car accident has to cover the costs of any injuries or property damage. Illinois auto insurance requirements make it imperative for all motorists to seek liability coverage, even if it is the most minimal coverage. If you are a high-risk driver unable to find an insurance company in the voluntary market, you can go through the residual market and enter the Illinois Automobile Insurance Plan. Residual market policies tend to be cost more than coverage most drivers would find on the regular market.
What is the Illinois Automobile Insurance Plan (ILAIP)?
The Illinois Automobile Insurance Plan was created in 1940 to provide coverage to those high risk drivers unable to get insured in the regular market. The ILAIP is considered to be a last resort option, so you should be absolutely sure that you can’t find insurance in the voluntary market before you apply for the ILAIP. ILAIP only insured 576 motorists in 2013-2014, which suggests that most motorists in Illinois were able to get covered in the voluntary market.
The ILAIP functions by placing high risk drivers into a residual pool, and then assigning them to regular insurance companies. Every insurance company authorized to sell auto insurance in Illinois must accept an annual quota of high risk drivers from the ILAIP based on their market share. For example, since State Farm controlled 26.8% of the market in Illinois in 2011, they would be required to insure 26.8% of the high risk motorists in the ILAIP’s pool.
Eligibility for ILAIP
In order to be eligible for insurance through the ILAIP, you must certify that you have attempted to buy auto insurance in the past 60 days and that you have been unable to either obtain any coverage or coverage with rates less than those issued by the ILAIP. Once your application is approved and you are assigned, your designated insurer must cover you for three consecutive years. Your ILAIP insurer is required to write you a policy for basic limits of bodily injury and property damage with the option of purchasing additional coverage.
At the end of the three year period, your designated insurer has the option of continuing to insure you by offering to write you a renewal policy. For example, if your designated insurer is Allstate through the ILAIP, and your producer believes you to be a safer driver than when you entered the residual pool, your policy could be rewritten in Allstate’s voluntary market. If you’re unable to obtain insurance at the end of the three year period, you can reapply for insurance through the ILAIP—your reapplication will be reviewed as a new application.
Premiums for policies issued through the ILAIP tend to be more expensive than similar coverage in the voluntary market. If ILAIP truly is your last resort, consider the ILAIP to be a short term solution while you try to build a better driving history so that you can access cheaper car insurance in Illinois’s standard market.
ILAIP’s Policies and Coverage
In Illinois, the basic limits of bodily injury liability are up to $25,000 per person in an accident and $50,000 per accident; the minimum property damage liability is $20,000. You can purchase additional bodily injury liability and physical damage liability coverage through the ILAIP at limits of $50,000/100,000/25,000 and $100,000/300,000/50,000.
Uninsured motorists coverage is provided at the minimum limits of liability. Medical expenses coverage is offered at a limit of up to $5,000 with increments of $1,000 and $2,000. If you’d like to add comprehensive and collision coverage to your policy, your deductible will depend on the Original Cost New of your vehicle:
- If your auto has an Original Cost New of $30,000 or less, your comprehensive and collision coverage deductible will be $250, $500, or $1,000 depending on the coverage you select.
- If your auto has an Original Cost New of greater than $30,000, your comprehensive coverage deductible will be $1,000, $2,500, or $5,000 and your collision deductible will be $500, $1,000, $2,500, or $5,000 depending on the coverage you choose.
Premiums & Payments
Your premium through the ILAIP will depend on the limits of coverage you choose, your age, where you live, your driving record, the type of car you drive, and various other factors.
When you submit your application for insurance under the ILAIP, you also have to submit either the full annual premium up front, or choose a payment plan and submit a deposit with your application. The ILAIP offers two different premium payment plans.
The Advanced Premium Payment Option (Liability and Physical Damage Coverages) allows you to pay a deposit with your application and your full annual premium within 30 calendar days of the date of your premium notice. The Installment Premium Payment Option allows you to make a deposit of 25% of your total annual premium when you submit your application and then pay the remainder of your balance over the course of 6 months.
How to Get Insurance through ILAIP
To get a quote for the ILAIP, contact an insurance producer near you. To contact ILAIP for more information, call (888) 706-6100
For information about how to apply to the ILAIP, visit the website: https://www.aipso.com/PlanSites/Illinois.aspx