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Illinois Car Insurance: Factors that Affect Car Insurance Rates

By Insurance.com Posted : 08/01/2006

If you are a driver in Illinois or anywhere for that matter, you know how complicated and confusing it can be to file a car accident claim, switch car insurance companies or simply add a person on to your policy. To help make things easier when dealing with your auto insurance company, we have listed some helpful tips for Illinois car insurance customers below. Understanding these items can not only save you a lot of time and money on your Illinois auto insurance, but it will also help you be better prepared in the event of a car accident.

1. How your Illinois car insurance company determines your car's value after it has been declared a "total loss"
When totaling your car, your insurance company's goal is to help you find a new car within the same market. To do this, car insurance companies use three different methods for determining the value of the car declared a total loss, such as:


If the car insurance company is unable to find a car from within your area, they may have to find a replacement car outside your zip code, which can dramatically affect your car's true value. For instance, if you reside in a big city within Illinois, such as Chicago, Aurora, or Rockford, then the cost of replacing your car will likely be more expensive then if you lived in a suburb or more rural part of Illinois.

2. Making a car insurance claim could increase your rates
Typically, insurance companies raise your car insurance rate by 40 percent in the event of an accident. However, some insurance companies will only increase your personal rate as opposed to your entire rate, but that is at the discretion of the insurance company.

If you are a good driver that does not have any driving violations, then you will want to consider going with a car insurance company that offers an "accident forgiveness" or "forgive the first accident" policy. This will help keep your insurance from fluctuating in the event that you file a car insurance claim.

3. Your credit history may determine your insurance premium
In the State of Illinois, the use of your credit history to determine your insurance premium is permissible. It may be used to determine your payment options, such as monthly, quarterly, or having to pay the entire premium at once. Your history may also be used by insurance companies to create an "insurance risk score". This score is used as a factor in determining your car insurance rates.

Pay your bills on time and try to improve your score if it is less than ideal. In doing so, you are helping to improve your credit history in the long run and you may save money on your car insurance premium.

4. When switching car insurance companies, you must cancel your insurance policy first
Though it is possible to cancel your coverage at anytime, it is important to note that many insurance companies require a written statement, including the date of termination, in order to officially close your car insurance policy. If you do not do this, and you receive and ignore the next bill, your policy will be canceled automatically by the insurance agency for delinquency of payment. The downside to this automatic cancellation is that it will show up on your credit record, which could potentially impact your credit score!

The safest thing to do when switching car insurance companies is to call your company and let them know that you are canceling your policy. The company will send you a cancellation request that needs to be filled out and sent back in.

5. Adding a teen to your car insurance policy
Most insurance companies do not require you to add your teen to your car insurance policy when they are a certain age, only when they receive their license. On the other hand, if you are in a high-risk pool, you may be required to add them when they receive their driver's permit. If you forget to add your licensed teen, and they are involved in a car accident, they will be covered; however, your insurance company may charge you back premiums from the date your teen received their license.

For your Illinois teen to begin the process of receiving their license, they must complete the following steps:

  1. Obtain a permit packet from the Illinois DMV
  2. Pass the vision and written knowledge tests
  3. Enroll in an approved Driver's Ed program
  4. Obtain an Instruction Permit
  5. Complete 50 hours of supervised behind-the-wheel
  6. Receive an Initial Driver's License
  7. Apply for a Full Driver's License


This process is for first time drivers who are at least 15 years old. To ensure that the teen driver receives ample time to practice and to offset the number of accidents that involve teen drivers each year, Illinois has different privileges for each provisional license:

Instruction Permit
A parent or guardian must sign for the Illinois teen's Instruction Permit. The teen must then take and pass a vision screening, written exam and a road sign test before they can officially receive their permit. While driving under this permit, teen drivers must be accompanied by a licensed, adult supervisor or qualified driving instructor. Under the Instruction Permit, teen drivers must complete 50 hours of behind-the-wheel driver training, including 10 hours of night driving with a parent or an adult age 21 or older.

Initial Licensing Phase
Once the teen has completed the requirements needed for the Instruction Permit, they are then able to move on to the Initial Licensing Phase. In order to qualify for the Initial Licensing Phase, teens must be at least 16 years old and have completed a state-approved driver's education course.

Under the Initial Licensing Phase, teen drivers are permitted to drive with one passenger under the age of 20 for the first six months or until the teen turns 18 years old, which ever comes first. The exception to this rule is if the passenger is a sibling, step-sibling, child or step-child of the driver. After this probationary period, teen drivers are allowed to have one passenger in the front seat and as many passengers in the backseat as there are seat belts. In addition to this rule, teens are not able to drive during certain hours. Check with your local police department to find out the driving curfews for your teenage driver.

Full Licensing Phase
Once the teen has completed the requirements needed and is 18 years old, they are then able to apply for a Full Driver's License.

To learn more about Illinois's teen driver laws and regulations, please visit the Illinois DMV.

6. Paying in installments may increase your car insurance
"Fractional premium" fees are usually charged when you divide your car insurance annual premium into installments. Six month, quarterly or monthly are the typical breakdowns for most insurance companies. Generally, the more you break down your installments, the higher the administrative/fractional premium fees are. Always ask when applying for a new car insurance policy, and see exactly what the fees are for each payment you break down. Make sure to also ask your insurance provider if they offer an alternative way to make payments, such as Automatic Clearing House (ACH) processing, which withdrawals the funds right from your checking account. This may help eliminate processing fees while helping you stick to your budget.

7. How much does your car model affect your premium
The auto insurance company premium rating system for cars is on a scale from 3 to 27. The ratings are established by the Insurance Services Office (ISO), and the higher the number of your model, the higher your premium will likely be. These numbers are only available to auto insurance companies - so, you're unable to try and find out your car's number before you purchase your car. But you can contact your car insurance company for a quote to gain an idea of how much it will cost to cover your new wheels.

8. Paying for someone else's bad driving
If you loan your car to someone and they end up crashing it, you will have to file a claim with your car insurance company. As a result, you will have to pay your deductible (or any that apply) and your rates could potentially increase your car insurance rate. If your car is taken without permission, you are typically not held liable. If the driver is uninsured and causes damages exceeding your policy limit, the injured party may come after you for medical or property-damage expenses and not your friend.

Even though most states typically have similar laws in place for car insurance, they do not typically have similar car insurance rates. That's because Illinois car insurance rates are influenced by Illinois's geographic location and its state laws. With that being said, it is always a good idea to shop around and compare the rates of various auto insurance companies. To assist you in the process Insurance.com offers an auto insurance comparison application. Here, you will be able to evaluate multiple rates from best-in-class insurance providers - helping you find the cheapest auto insurance coverage for your budget.

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