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Garage Liability Insurance in Illinois

Illinois requires new and used vehicle dealers to file liability insurance for each licensed location at minimum limits of $100,000/$300,000/$50,000. For a used-dealer test drive, the dealer’s insurer is primary; other permitted uses follow a separate priority rule based on the driver’s own insurance, so describe test drives and loaners to your broker. 1,2

What Is Garage Liability?

Garage liability can address injury and property-damage claims from auto repair and related garage operations. If you run a repair or service shop, check separately whether customer cars in your care need garagekeepers coverage for vehicle damage. Read the national Garage liability guide.

Illinois Requirements

RequirementDetails
New and used vehicle dealer application, each location$100,000 per person / $300,000 per crash / $50,000 property damage; trailer and mobile-home dealers are exempt 1,2

What to Watch for in Illinois

  • File for Each Dealer Location

    Illinois requires a certificate from a solvent company authorized in the state with each new- and used-dealer application, covering every proposed dealer location. Trailer and mobile-home dealers are exempt from this requirement; identify each licensed address and any exception before filing. 1,2

  • Dealer Insurance Is Primary on Used-Car Test Drives

    Illinois §5-102 says the used dealer’s insurance is primary and the permitted user’s is secondary during a test drive. For other permitted uses, the driver’s insurer is primary only when the user has at least $100,000/$300,000/$50,000; otherwise the dealer is primary. Tell the broker how your staff verify drivers and document loaner use. 2

  • Check New-Car User Priority Separately

    For a new dealer, §5-101 makes the permitted user’s insurer primary when the user has an auto policy meeting $100,000/$300,000/$50,000; otherwise the dealer’s insurer is primary. Confirm which rule applies to your licensed line and how your quote coordinates customer test drives. 1

  • Separate Customer Cars in Your Shop

    The dealer-vehicle limits and permitted-user priority rules do not establish protection for a customer’s car left for repair. Ask how the contract treats customer-owned vehicles while you repair, park, tow, or road-test them. 1,2

Who Regulates Insurance in Illinois

Illinois Department of Insurance

The Department licenses and oversees insurers and insurance producers doing business in Illinois, reviews regulated insurance activity, and investigates complaints about coverage, claims, premiums, and sales. 3,5,4

Surplus-lines tax and stamping office

Reported tax rate: 3.5% of taxable premium plus a 0.04% stamping fee; separate 1% fire marshal tax on taxable fire premium When Illinois is the insured’s home state, the broker reports and remits a 3.5% tax on gross taxable surplus-line premium less returned taxable premium. The separate SLAI stamping fee is 0.04% for policies effective on or after January 1, 2023; a 1% fire marshal tax also applies to taxable fire premium. 7,6,10,11,8

Surplus Line Association of Illinois

  • Illinois guaranty fund limits: For covered claims against a member insurer, the Illinois Insurance Guaranty Fund generally caps its obligation at $500,000 per claim; workers’ compensation claims are excepted from that dollar cap. This fund does not protect policies issued by nonadmitted surplus-lines insurers. The net-worth exclusions apply to covered claims against member insurers. 8
  • Illinois FAIR Plan: If you cannot obtain basic property coverage in the voluntary market, the Illinois FAIR Plan offers a residual-market option for eligible property. Check its current eligibility and coverage limits before relying on it for a commercial location. 9

Providers With Documented State Licenses

No provider in Spot’s research documents both a state license record and this coverage line. This does not establish that providers are unlicensed. Check the regulator’s license lookup and confirm availability with a provider when requesting a quote.

Questions to Ask Before You Buy in Illinois

  1. Does the certificate cover every Illinois new- or used-dealer location and show the correct licensed entity at each address?
  2. For used-car test drives, how does our process reflect the rule that the dealer insurer is primary; how do we verify customer insurance for other permitted uses?
  3. Does the quote separately address customers’ cars while we repair, park, tow, or road-test them?

Garage Liability in Illinois: FAQ

What liability limits does Illinois require for a vehicle dealer application? 1,2

Illinois requires at least $100,000 per person, $300,000 for two or more people in one crash, and $50,000 property damage for each covered new- or used-dealer location. Trailer and mobile-home dealers are exempt from this requirement. 1,2

Whose insurance is primary when a customer test-drives an Illinois used dealer’s car? 2

The used dealer’s insurer is primary and the permitted user’s is secondary during a test drive. For other permitted uses, the user’s policy is primary only if it meets $100,000/$300,000/$50,000; otherwise the dealer’s is primary. 2

When does Illinois generally require a used vehicle dealer license? 2

Section 5-102 generally reaches a business dealing in five or more used vehicles during the year, with statutory exceptions. It separately requires liability insurance at each dealer location. 2

Garage Liability in Other States

Other Coverage in Illinois

Sources

  1. 625 ILCS 5/5-101, New vehicle dealers must be licensed. Illinois General Assembly; §5-101(b)(6), including certificate/location requirement, limits, exemption, permitted-user priority. Accessed 2026-09-28.
  2. 625 ILCS 5/5-102, Used vehicle dealers must be licensed. Illinois General Assembly; §5-102(a); annual five-vehicle threshold and exceptions. Accessed 2026-09-28.
  3. Illinois Department of Insurance. Illinois Department of Insurance; Official agency homepage and agency information. Accessed 2026-09-28.
  4. File a Complaint. Illinois Department of Insurance; Official insurance complaint intake and consumer phone. Accessed 2026-09-28.
  5. Calculating & Remitting Taxes: Surplus Line Tax. Surplus Line Association of Illinois; Current surplus-line tax applicability and rate. Accessed 2026-09-28.
  6. 215 ILCS 5/445: Surplus line. Illinois General Assembly; Subsections (3)(a), (12): tax and code applicability. Accessed 2026-09-28.
  7. 215 ILCS 5: Illinois Insurance Guaranty Fund. Illinois General Assembly; Article XXXIV: cap, net-worth exclusions, exceptions, and non-admitted insurer exclusion. Accessed 2026-09-28.
  8. Illinois FAIR Plan Association. Illinois FAIR Plan Association; Plan overview and current eligibility information. Accessed 2026-09-28.
  9. Stamping Fees: Fee Calculation. Surplus Line Association of Illinois; Current stamping fee 0.04% of premium for policies effective January 1, 2023 or later; may be passed to insured. Accessed 2026-09-28.
  10. 50 Ill. Adm. Code § 2701.130: Taxes. Illinois Joint Committee on Administrative Rules; Surplus line producer pays 1% fire marshal tax on gross premiums less returned premiums for insurance subject to the Fire Investigation Act. Accessed 2026-09-28.
  11. Licenses. At-Bay; Current producer introduction and state table; At-Bay Insurance Services LLC; P&C and surplus-lines identifiers. Accessed 2026-09-21.
  12. Licenses and Carriers. Coalition; Licenses and Carriers, re-read 22 September 2026: Insurance Licenses table for Coalition Insurance Solutions, Inc., national producer number 18419475, with producer and surplus-lines numbers for all 50 states and DC including California 0L76155, Georgia 196479, Texas 2199630 and 2205589, Pennsylvania 815731 and 817452, Colorado 539028 and Wisconsin 3000108852. Insurance Carriers table naming, with NAIC numbers, Allianz Underwriters Insurance Company 36420, Arch Specialty Insurance Company 21199, Ascot Specialty Insurance Company 45055, Ascot Insurance Company 23752, Aspen Specialty Insurance Company 10717, Chaucer Insurance Company DAC, Coalition Insurance Company 29530, Fireman's Fund Indemnity Corporation 11380, Fortegra Specialty Insurance Company 16823, Lloyd's of London, MSIG Specialty Insurance USA Inc. 34886, MS Transverse Specialty Insurance Company 41807, Steadfast Insurance Company 26387, Vantage Risk Specialty Insurance Company 16275 and Zurich American Insurance Company 16535. Accessed 2026-09-22.
  13. Insurance Producer Licenses. Corgi Insurance; Current complete Insurance Producer Licenses table for Corgi Insurance Services, Inc.; 50 rows covering 49 states and DC (DC 3003091619); no New Mexico row; no NPN or as-of date shown. Accessed 2026-09-28.
  14. About Hiscox US Insurance. Hiscox; Hiscox Insurance Company Inc. NAIC 10200 as Chicago, IL domiciled insurer admitted or licensed in all 50 states and D.C.; Hiscox Inc. as general agent and Lloyd’s coverholder for Syndicates 33 and 3624; surplus-lines placements through licensed surplus-lines brokers; A.M. Best rating statement. Accessed 2026-09-16.
  15. Licenses. ERGO NEXT Insurance; Current entity-by-state license table reopened 28 September 2026: 50 rows under Next First Insurance Agency, Inc., including Washington, DC; New York rows instead list Next Insurance Services PC-1423070 and AP Intego BR-1198885. Accessed 2026-09-28.
  16. About Risklytics. Risklytics; What we do; Who we insure; Licensing; Agency licenses table dated 2026-09-10. Accessed 2026-09-16.
  17. Insurance Licenses by State. TechInsurance; Current state table; identifies TechInsurance as a division of Specialty Program Group LLC d/b/a SPG Insurance Solutions; lists DC 3000041536 and labels Rhode Island “Individual licenses,” without an agency license number. Accessed 2026-09-28.
  18. Licenses. Vouch; Effective 16 January 2025: Vouch Specialty Insurance Services, LLC, NPN 19926463; P&C table (50 states and DC); surplus-lines table includes Idaho 870820; footnote says Georgia and Idaho do not issue agency-level surplus-lines licenses; Idaho retained as producer-only due to conflict. Accessed 2026-09-15.

Updated .

This guide is informational and does not determine whether a policy is available or meets your needs. Editorial policy. To suggest a correction, contact Spot with a supporting source.

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