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When insurance companies refuse to honor their obligations to policyholders, it’s more than frustrating, it can be devastating. Insurance bad faith occurs when insurers unreasonably deny, delay, or undervalue legitimate claims, leaving accident victims without the compensation they need. If you believe your insurance company is acting in bad faith after a Chicago accident, an experienced insurance bad faith lawyer can hold them accountable.
What Constitutes Insurance Bad Faith in Illinois?
Insurance bad faith involves an insurer’s failure to deal fairly with policyholders. Common examples include:
- Unreasonable claim denials – Denying valid claims without proper investigation or justification
- Delayed payments – Unnecessarily prolonging the claims process to pressure settlements
- Lowball settlements – Offering far less than claims are worth
- Failure to investigate – Not properly examining claims before denial
- Misrepresenting policy terms – Claiming coverage doesn’t exist when it does
- Refusing to defend – Failing to provide legal defense when required
- Improper claim handling – Losing documents, missing deadlines, or failing to communicate
Types of Insurance Bad Faith Claims
Bad faith can occur with many types of insurance policies:
- Auto insurance claims – After car accidents, motorcycle crashes, or truck collisions
- Health insurance claims – Denial of medical treatment coverage
- Homeowner’s insurance – Property damage claim disputes
- Disability insurance – Wrongful denial of disability benefits
- Life insurance – Refusal to pay death benefits
- Workers’ compensation – Disputes over workplace injury coverage
- Uninsured/underinsured motorist claims – Your own insurer acting in bad faith
Illinois Insurance Bad Faith Law
Illinois provides multiple avenues for pursuing bad faith insurance claims. Under 215 ILCS 5/155, policyholders can recover additional damages when insurers engage in vexatious and unreasonable delay or denial of claims. The Illinois Insurance Code requires insurers to act in good faith and deal fairly with policyholders.
Remedies for insurance bad faith in Illinois may include:
- The original claim amount owed
- Statutory penalties up to $60,000
- Attorney’s fees and costs
- Interest on delayed payments
- Punitive damages in egregious cases
How to Compare Firms
There is no objective ranking of the “best” injury lawyer in Chicago, and you should be sceptical of any list that claims otherwise — including lists published by law firms themselves. What does exist is a set of questions that reliably separate a firm that will do the work from one that will not. Ask each firm you speak to:
- Who will actually handle my file? The lawyer in the advertisement is often not the lawyer doing the work. Ask for the name of the person who will run your case and how often you will hear from them.
- How many cases like mine have you taken to trial? Settlement value is influenced by whether the other side believes you will try the case. A firm that never tries cases negotiates from a weaker position.
- What is your fee, and what happens to costs if we lose? Contingency fees are standard, usually around one third. Case costs — filing fees, expert witnesses, medical records — are a separate question, and you should get a clear written answer about who pays them if the case does not succeed.
- What is my deadline? A firm that cannot tell you which limitations period applies to your specific facts is not the right firm. Some Illinois deadlines are one year, not two.
- What is this case realistically worth, and why? Be wary of a number promised at the first meeting, before anyone has reviewed your medical records.
Where Phillips Law Offices Fits
A disclosure, because it matters when you are weighing this advice: this guide is published by Phillips Law Offices, and we are one of the firms you could hire. We have handled Illinois injury cases since 1945 and we work on contingency, so there is no fee unless we recover for you. You should still do exactly what this guide recommends and speak to more than one firm before signing anything. Most reputable firms, ours included, offer a free consultation precisely so you can compare.
If you want to talk it through, call (312) 346-4262 or request a free case review. Prior results do not guarantee a similar outcome; every case depends on its own facts.
Signs Your Insurer May Be Acting in Bad Faith
Watch for these warning signs that may indicate bad faith:
- Repeated requests for the same documentation
- Unexplained delays with no communication
- Denial letters citing vague or incorrect policy provisions
- Pressure to accept quick, low settlements
- Misrepresenting what your policy covers
- Failure to provide a written explanation for denial
- Threatening to cancel your policy if you pursue your claim
- Refusing to negotiate in good faith
Compensation in Bad Faith Cases
Insurance bad faith victims may recover:
- Contract damages – The full amount owed under the policy
- Consequential damages – Additional losses caused by the denial or delay
- Statutory penalties – Additional amounts under Illinois law
- Emotional distress damages – In certain circumstances
- Attorney’s fees – Recovery of legal costs
- Punitive damages – To punish particularly egregious conduct
Steps to Take If You Suspect Bad Faith
- Document everything – Keep copies of all communications with your insurer
- Put requests in writing – Create a paper trail for all claim-related matters
- Request written explanations – Ask for detailed denial letters
- Review your policy – Understand what coverage you purchased
- File complaints – Report suspected bad faith to the Illinois Department of Insurance
- Consult an attorney – Get legal advice before accepting any settlement
Official Resources
- Illinois Insurance Code – 215 ILCS 5/155
- Illinois Department of Insurance – File a Complaint
- National Association of Insurance Commissioners
Related: How to Choose a Car Accident Lawyer in Chicago | How to Choose a Personal Injury Lawyer in Chicago
How to Respond to Delayed or Denied Insurance Claims
When an insurer delays or denies payment, request a written explanation that cites exact policy language and factual support. Keeping organized communication records helps establish whether the carrier engaged in unreasonable claim handling under Illinois standards.
This guide is part of our Hiring a Chicago Injury Lawyer section, where you can find every related guide on this site.