Understanding “First Party” Bad Faith Insurance Claims in Illinois
When you are hurt, or have major property damage or loss, you expect your own insurance company to provide timely and fair support to help in your recovery. After all, you paid premiums diligently with the belief that the company would act appropriately and give the aid you need in the event of an unexpected incident.
Unfortunately, as too many residents in Chicago and across Illinois have learned, first-hand, insurance companies may provide less than adequate help in the aftermath of an accident. Fighting with an insurance company comes with more than just financial pressure, it can also add mental and emotional stress to an already difficult situation.
For this reason, it is critical to understand that a section of the Illinois Insurance Code specifically allows for you to recover damages if your own insurance company is unreasonable and “vexatious” in disputing your claim, delaying, or refusing to provide coverage altogether. Vexatious means that the company’s actions were without a good basis and caused frustration, anxiety and worry.
Importantly, this option to hold your own insurance company accountable for “bad faith” may lead to damages in addition to what was already owed under the policy. The purpose of the law is, in part, to deter companies from fighting valid claims in order to increase their own bottom line.
Proving Bad Faith
When pursuing these claims, you must prove two specific elements:
- That your insurance company delayed settling your claim, refused to cover your claim for the amount of your claim or disputed the amount of your claim, and
- That the company’s action was unreasonable and vexatious.
In most cases, it is the second issue, whether or not the conduct was unreasonable, that is most contested. To determine whether the action was unreasonable, courts will usually look at many different factors (“the totality of the circumstances”). Some examples of unreasonableness include situations where an insurer does not investigate claims quickly, makes unfairly low settlement offers, and engages in coercive practices in order to force a settlement
When you succeed on a bad faith claim, the court may order the insurance company to pay “damages.” Damages is a legal term that has different meanings. In this case, damages can include attorney’s fees, court costs, pre-judgment interest, and potentially other losses that you sustained as a result of the insurance company’s actions.
These cases can arise in many different situations. One of the most common is in the context of car accidents and motor vehicle insurance companies. In fact, actions for bad faith have even been extended by Illinois courts to include cases of “underinsured” or “uninsured” motorist claims.
A legal claim under Illinois bad faith law is just one of many different options that you may have if you are not being treated fairly by your insurance company. An experienced bad faith attorney can explain what additional choices you have to recover the full compensation to which you are entitled. The Blumenshine Law Group is here to help residents in the Chicago area with these issues. Feel free to contact us online or by telephone at 312-766-1000.
Need to learn a bit more about insurance claims here in Illinois? Here are some other great articles on our site that can help provide even more information.