Liability car insurance is legally required in Illinois and most other states—but many drivers don’t fully understand what it actually covers. In short, liability insurance pays for damage or injuries you cause to others in an accident, not your own losses. Without it, a single crash could expose you to costly lawsuits, medical bills, and property damage claims.
For help understanding your liability limits or to get a quote, call Insure on the Spot at 773-202-5060.
What Is Liability Insurance?
Liability insurance is the part of your auto policy that covers expenses for other people when you’re at fault in an accident. It’s often called “third-party” coverage because it pays for damage to others—not you.
If you cause a crash, liability coverage helps pay for:
- Medical bills and lost wages for injured parties
- Repairs to other people’s vehicles or property
- Legal costs if you’re sued
Illinois requires all drivers to carry liability coverage to legally operate a vehicle.
Why Is Liability Insurance Required in Illinois?
The goal of liability insurance is to protect others—and your finances—after an at-fault accident. In Illinois, driving without insurance can result in:
- A fine of at least $500
- Suspension of your vehicle registration
- Personal financial responsibility for any damages
At a minimum, Illinois requires:
- $25,000 for bodily injury per person
- $50,000 per accident for bodily injury
- $20,000 for property damage
This is referred to as 25/50/20 liability coverage.
What Does Liability Insurance Cover?
Liability insurance is divided into two main components:
Bodily Injury Liability (BI)
Covers medical costs and other damages for people injured in an accident you cause, including:
- Drivers and passengers in the other vehicle
- Pedestrians
- Passengers in your vehicle (in some cases)
BI coverage may also include:
- Lost wages
- Pain and suffering
- Funeral costs
- Legal defense if you’re sued
Property Damage Liability (PD)
Covers the cost of repairing or replacing property you damage, including:
- Other vehicles
- Mailboxes or fences
- Buildings, storefronts, utility poles
- Personal items in another vehicle (like a laptop)
Each coverage has a maximum limit. If damages exceed that amount, you’re personally responsible for the rest.
What Doesn’t Liability Insurance Cover?
Liability coverage has important limitations. It does not cover:
- Your Own Vehicle Damage
You’ll need collision coverage to repair or replace your car. - Your Own Medical Bills
Consider Medical Payments (MedPay) or Personal Injury Protection (PIP) for your injuries. - Injuries to Household Members
Liability often excludes relatives in your household unless they’re specifically listed. - Personal Belongings in Your Car
Use renters or homeowners insurance for stolen or damaged personal items. - Accidents You Didn’t Cause
If you’re the victim, the at-fault driver’s liability insurance pays for your damages—or your Uninsured Motorist (UM) coverage if they lack insurance. - Intentional Damage
Liability only applies to accidents, not deliberate acts. - Costs Beyond Your Policy Limits
If damages exceed your coverage limits, you’re liable for the difference.
How Much Liability Coverage Do You Need?
Illinois requires minimum 25/50/20 coverage—but this may not be enough. If you cause a serious accident, minimum limits could leave you paying out of pocket.
Recommended Coverage:
- 50/100/50 or
- 100/300/100
These higher limits offer far better protection and often cost just a little more.
Illinois Minimums vs. Recommended Coverage
| Coverage Type | Illinois Minimum | Recommended Starting Point |
| Bodily Injury (per person) | $25,000 | $100,000 |
| Bodily Injury (per accident) | $50,000 | $300,000 |
| Property Damage | $20,000 | $100,000 |
Higher coverage protects your home, savings, and wages if you’re found liable in a serious accident.
When Should You Consider More Than Liability-Only Insurance?
Liability-only coverage may work for:
- Drivers of older, low-value vehicles
- People who can afford to replace their car out-of-pocket
- Budget-conscious drivers
But you should consider full coverage (liability + collision + comprehensive) if:
- You have a newer car or lease
- You’d struggle to pay for major repairs
- You drive often or in busy areas
- You want added protection for yourself and your passengers
Real-World Examples of Liability Insurance in Action
Example 1: Fender-Bender
You sideswipe a parked car. Your PD coverage pays $2,500 to fix the other car. Your car’s damage isn’t covered—unless you have collision insurance.
Example 2: Multi-Car Accident
You cause a 3-car pileup with several injuries. Your 25/50/20 policy falls short, and you owe an additional $60,000. With 100/300/100 coverage, you would have been fully protected.
Example 3: Lawsuit
You cause an accident that leads to a severe injury. You’re sued for $200,000. With only $50,000 BI coverage, you must pay the remaining $150,000 personally. Higher liability limits (or umbrella insurance) would protect you.
Frequently Asked Questions About Liability Insurance
Q: What does liability insurance cover?
A: It pays for other people’s medical bills, lost wages, pain and suffering, and property damage when you’re at fault in an accident.
Q: Does liability insurance cover my car?
A: No. It only covers damage you cause to others. Collision coverage is needed for your own vehicle.
Q: Does it cover my medical expenses?
A: No. You’ll need MedPay, PIP, or health insurance for your own injuries.
Q: Is liability car insurance required in Illinois?
A: Yes. All Illinois drivers must carry 25/50/20 liability insurance at a minimum.
Q: How much coverage should I have?
A: Experts recommend at least 50/100/50 or ideally 100/300/100 to protect your assets in a serious accident.
Get the Right Liability Coverage for Your Needs
Liability insurance protects you from the financial fallout of an accident—but only if your limits are high enough. If you’re unsure about your current coverage or want to explore your options, Insure on the Spot is here to help. Call 773-202-5060 for a free quote and let our team guide you to the best protection at the lowest possible rate.