PLIllinoismedium
An Illinois resident's personal auto policy carries 25/50/20 liability. The insured drives to Wisconsin, where the minimum financial responsibility limits exceed Illinois minimums. How does the policy's out-of-state coverage provision typically respond?
AThe policy lapses while the auto is outside Illinois
BLimits remain at Illinois minimums regardless of where loss occurs
CThe insured must purchase a separate non-resident endorsement before crossing state lines
Limits are automatically increased to meet the higher minimums of the state where the auto is being operated
Why this is the answer
The personal auto policy's out-of-state coverage provision provides that when an accident happens in a state whose financial responsibility or compulsory insurance law requires higher limits than the policy carries, the policy is automatically deemed to provide those higher limits — but only as much as needed to comply with that state's law. The insured does not need to buy a separate endorsement, and the policy does not lapse outside Illinois.
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