Liability insurance, which provides bodily injury and property damage coverage, is required by law on all licensed motor vehicles. Bodily injury pays costs from injury or death to a pedestrian or person in another car if you are legally responsible for the crash. Illinois' law requires bodily injury limits of $25,000 per person and $50,000 per accident. Property damage pays damage to another person's car or property like fences, buildings, utility poles, signs and trees when you are legally responsible for damages You must have $20,000 property damage coverage.

Keep in mind that minimum liability limits may not be enough to protect your financial assets. Choose liability limits in line with your net worth as this is the amount you could lose if you are responsible for a serious accident.

Uninsured and underinsured motorist coverages pay for injury-related damages like medical bills, lost wages or pain and suffering that you and your passengers have following an auto accident with an uninsured driver or one with limits lower than your UIM limits. It is best to match UM and UIM limits with bodily injury limits.

Physical damage insurance covers damage to your vehicle. It is split into two separate coverages. Comprehensive pays for damage caused by events like theft, vandalism, hail, fire, falling objects and animals. Collision pays for damage caused by a crash with another car or fixed object (tree, fence, pole, etc.). Both have deductibles.