Best Car Insurance in Illinois

Why are car insurance laws so different from state to state?

Car insurance laws vary substantially from state to state because the regulations governing the industry are primarily set at the state—not federal—level. This is due to a law (the McCarren-Ferguson Act) that the federal government passed in the 1940s. Because each state’s legislature (along with their insurance commissioner) gets to decide what restrictions are placed on the auto insurance market, we have seen a diversity of approaches to resolving the same regulatory problems. The different rules that states have enacted are a result of the political and cultural differences among states.

For instance, one issue in auto insurance regulation concerns how to make sure that policyholders will have coverage for injuries they suffer in an accident. This can be a significant problem when there are hit-and-run accidents. Some state legislatures have decided that the best way to address this problem is to mandate that auto insurance policies are written on a no-fault basis. Other states require all policies to include uninsured motorist coverage. And a third set of states requires that insurers offer policyholders the option of purchasing uninsured motorist coverage. Which group a state falls into can be explained by how willing that state’s government is to regulate private businesses, its views on consumer choice, and other related issues.

What are the pros and cons of choosing a national car insurance company over a local insurer?

First, consumers should know that there is not a consistent difference between national and local car insurance companies when it comes to rates. With that noted, there are some general distinctions that can be made between them that individuals should be aware of.

Because national insurance companies are generally larger than local insurers, they are more likely to offer certain service-related amenities to their customers. For instance, national insurers may offer more comprehensive online services or 24-hour telephone support. Similarly, national insurers are more likely to offer technologically-enhanced discount programs, like those that use telematics sensors to reward good drivers.

Local insurance companies may have better knowledge about unique risks that drivers in their region are likely to face. With this knowledge, they may be in a better position to advise a consumer about their potential needs and could suggest supplemental coverages that could help them meet these needs. Additionally, individuals who prefer to deal with the same agent over the long term may be better served with a local insurer.

What are the most important things to look for when shopping for car insurance?

While there will be some variance across consumers when it comes to the most important things to look for, a few policy fundamentals should matter to everybody.

First, consumers should compare premium rates across several companies, taking into consideration any regular discounts they may qualify for.

Second, individuals should make sure the policies they are considering will provide them with the maximum coverage limits they want. Insurance companies will typically offer lower coverage limits in their standard policy, which will be a poor fit for individuals with high-value automobiles or those who want the security offered by expanded liability limits.

Finally, consumers should carefully review the endorsements that an insurer proposes adding to the basic policy form. These endorsements can substantially change the terms that appear in the policy—adding, removing, or modifying the coverage that is being offered.