Insurance in Illinois: State Rules and Requirements

Insurance in Illinois

The rules that shape car, home and business insurance in Illinois, each linked to its official source, and how to get coverage shopped here. Sam Alishahi holds an Illinois nonresident insurance producer license (NPN 21022298) and places Illinois policies directly.

By Sam Alishahi · Reviewed October 2026

Car insurance in Illinois (25/50/20)

Minimum car insuranceIllinois requires at least $25,000 bodily injury per person, $50,000 per accident and $20,000 property damage. Uninsured motorist bodily injury coverage of at least $25,000/$50,000 is automatically included in every liability policy. PIP is not required. Source
Fault systemIllinois is an at-fault (tort) state: the driver who causes a crash is responsible for the resulting injuries and property damage. Source

Business insurance rules in Illinois

Workers’ compensationAlmost every employer must carry workers' compensation, even with only one part-time employee. Businesses in extra-hazardous work such as construction must have coverage. Illinois is not monopolistic and does not allow opting out; employers insure privately or get Commission approval to self-insure. Source
Contractor licensingIllinois has no statewide general contractor license, so general contracting is licensed locally. Roofing contractors are licensed by the Department of Financial and Professional Regulation and must post a surety bond ($10,000 limited or $25,000 unlimited), carry liability insurance of at least $500,000 bodily injury and $250,000 property damage, and show workers' compensation coverage. Source

Home insurance in Illinois

Home insurer of last resortThe Illinois FAIR Plan offers basic property and homeowners coverage to people who cannot get it in the voluntary market, and insurers that cancel or nonrenew must tell the insured they may be eligible. Severe thunderstorms with hail, high wind and tornadoes are the main catastrophe exposure for Illinois homes. Source

High-value homes in Illinois.

Disasters, floods, hail, tornadoes and earthquakes in Illinois

Illinois disasters, floods, hail, tornadoes and earthquakes, from federal records
Measure	Illinois	Rank among the states	Detail
Federal major disaster declarations since 2000	23	#32 of 51	Most often for severe storm (13), flood (6), tornado (2). Pike County has been in 9 of them.
National Flood Insurance Program claims, 2005–2025	21,860	#15 of 51	$385.9 million paid; 25% of claims with a known flood zone were outside FEMA’s high-risk zones.
Homes in high-risk flood zones with a federal flood policy	22%	#28 of 50	12,648 policies for 57,540 homes in the counties FEMA can measure; US: 40%.
Hail reports, 2016–2025	2,878	#10 of 51	196 of them 2 inches or larger. Largest stone 6.6 inches, Kankakee County, March 2026.
Tornadoes, 2016–2025	760	#4 of 51	61 rated EF2 or stronger; 3,149 recorded since 1950.
Earthquakes of magnitude 4.0+, 2000–2025	4	#19 of 51	Largest: magnitude 5.2, 7 km NNE of Bellmont, Illinois, April 18, 2008.

From the public FEMA, NOAA, Storm Prediction Center, USGS and FMCSA records behind each linked report; ranks count all 50 states and Washington, DC unless noted.

Look up the storm history of any county in Illinois.

The property risks that matter in Illinois

Southern Illinois is close to the New Madrid Seismic Zone, and Chicago-area homeowners often need sewer and water backup endorsements.

Tornadoes are a regular part of spring in Illinois. Wind is usually covered, but check for a wind/hail deductible, confirm your additional living expense limit, and keep a home inventory off-site.

Large hail regularly damages roofs, siding and vehicles in Illinois. Comprehensive coverage handles hail on your car; on your home, check the roof settlement terms and any cosmetic-damage exclusion.

Flooding is the most common U.S. natural disaster, and it is excluded from regular home policies. Illinois residents outside high-risk zones can often buy NFIP or private flood coverage at lower cost; remember the typical 30-day waiting period.

Winter storms drive many Illinois claims: frozen and burst pipes, ice dams and roof collapse from snow load. Sudden pipe bursts are usually covered, but losses from failing to maintain heat in a vacant home may not be. Water backup coverage is a separate endorsement.

Worth knowing in Illinois

Illinois has long been one of only two states (with Wyoming) that did not regulate auto and homeowners insurance rates. In August 2026 the governor signed SB 714 and HB 4273, which let the Department of Insurance review and reject excessive auto and homeowners rates starting July 1, 2027.

Before your next Illinois renewal

Compare your auto liability limits with the Illinois minimum of 25/50/20 and with your actual assets.
Confirm whether your wind/hail deductible is a flat amount or a percentage.
Read the roof settlement clause and ask whether Class 4 impact-resistant shingles earn a credit.
Check your address on FEMA's Flood Map Service Center and price an NFIP or private flood policy before storm season (NFIP usually has a 30-day wait).
Add water backup coverage and keep heat on when the home is empty.
Condo owners: compare your HO-6 loss assessment limit with the HOA master deductible.

Illinois’s insurance regulator

Insurance in Illinois is regulated by the Illinois Department of Insurance, which handles consumer complaints and licenses insurers and agents.

Sam Alishahi holds an Illinois nonresident insurance producer license (NPN 21022298) and places Illinois policies directly.

Common questions

What is the minimum car insurance in Illinois?

Illinois requires at least $25,000 bodily injury per person, $50,000 per accident and $20,000 property damage. Uninsured motorist bodily injury coverage of at least $25,000/$50,000 is automatically included in every liability policy. PIP is not required.

Is Illinois a no-fault state?

Illinois is an at-fault (tort) state: the driver who causes a crash is responsible for the resulting injuries and property damage.

Do employers in Illinois need workers’ comp?

Almost every employer must carry workers' compensation, even with only one part-time employee. Businesses in extra-hazardous work such as construction must have coverage. Illinois is not monopolistic and does not allow opting out; employers insure privately or get Commission approval to self-insure.

What can an Illinois homeowner do if no insurer will write the house?

The Illinois FAIR Plan offers basic property and homeowners coverage to people who cannot get it in the voluntary market, and insurers that cancel or nonrenew must tell the insured they may be eligible. Severe thunderstorms with hail, high wind and tornadoes are the main catastrophe exposure for Illinois homes.

Are tornadoes covered by homeowners insurance in Illinois?

Yes, as windstorm damage, subject to your deductible, which may be a separate wind/hail deductible.

Will my Illinois policy pay to replace a hail-damaged roof?

It depends on the roof settlement terms. Some policies pay replacement cost; others pay actual cash value on older roofs or exclude cosmetic damage.

More answers: Illinois homeowners insurance guide Illinois renters insurance and security deposit guide Illinois life insurance consumer guide Illinois flood risk and NFIP guide Chicago home and auto insurance guide Guía de seguro de inquilinos y depósito de garantía en Illinois Guía de seguro de vida para consumidores en Illinois Guía de riesgo de inundación y NFIP en Illinois Guía de seguro de hogar y auto en Chicago

Sources

General information as of October 2026, not legal advice; confirm current rules with the agency.

Tell me what you need insured.

Home, car, business, trucks or something harder to place. One request, and I take it from there.

Alishahi Insurance · Saman Alishahi, independent insurance broker, 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210. General information, not a quote or a promise of coverage.

Insurance in Illinois