When you’re dealing with a claim against an insurance company, whether it’s your insurance company or another party’s insurer, you should know the insurer’s responsibilities. An insurance company has the duty of upholding the insurance policy (a contract), adhering to Illinois insurance law, and treating policyholders and claimants fairly. The Illinois administrative code also establishes several timelines insurance companies have to follow.
By working with an attorney, you have someone who knows Illinois insurance law and can hold an insurer accountable for fulfilling their duties. Call Staver Accident Injury Lawyers, P.C. at (312) 236-2900, to learn more about the duty of the insurer in your case. You also can reach us through our online form to schedule a free consultation.
What are an Insurance Company’s Duties During a Claim?
Start a Claim Promptly
Once you file a claim with an insurance company, it’s responsible for opening a new claim and assigning an employee to the matter.
Provide Necessary Forms
An insurer has 15 days from your request to provide any necessary forms, along with explanations on how to use the forms properly.
Investigate the Claim Thoroughly and Within a Reasonable Time
Insurers are required to investigate the claim within 21 days of being notified of your loss or injuries. The information they gather and who they talk to depends on the circumstances. For example, after a car accident, the insurer will want to review the police report, repair estimates for the vehicle, and medical records. They’ll want to talk to the drivers involved in the crash.
Respond to Communications
Insurance companies are required to respond to communications from the insured person or claimant within 15 working days of receiving that communication, which could be a phone call, email, and letter.
Provide Written Approval or Denial
Within a reasonable time, the insurer must either approve or deny your claim. For a first-party claim, if the insurer denies the claim or offers a settlement for less than your demand, it has 30 days from the completion of its investigation to provide notice in writing of the basis for the denial or settlement offer.
The explanation should include the relevant policy provisions, policy definitions, and limitations, exclusions, or conditions the decision was based on. For a third-party claim, the insurer has 30 days to provide the claimant with a written explanation for the basis of the denial.
Pay Claim When Liability & Amount Aren’t in Dispute
Many insurance claims are relatively straightforward. If the insurance company agrees your claim is covered by the policy, then they have 30 calendar days to pay out on your claim from the day they affirm liability. For car accident claims, the insurer has 40 days from the date of the notification of your damages to provide payment or provide an explanation for the reasonable delay.
Insurance Company Duty to Defend
When you file a third-party claim against another person’s insurance policy, or someone files a claim against you, the insurance company has a duty to defend their policyholder. This duty is important to you when another person blames you for their injuries or property damage. They’ll pursue a claim against your policy. The insurer has to open and investigate the claim, and then either affirm or deny your liability.
You want the insurer to defend you against wrongful claims. But you don’t want it to deny a valid claim. If an insurer wrongfully denies a third-party claim or refuses to settle for a fair amount, the other party is likely to file a lawsuit against you personally.
Also, consider this if you have to file a third-party claim after an accident. The insurer will look for reasons to deny liability or to pay as little as possible on your claim. This is part of its duty to defend its policyholder. By working with an experienced attorney, you have someone to fight for you to receive the maximum compensation.
It isn’t in the insurer’s best interest to refuse to negotiate a fair settlement. But if it refuses to settle for an appropriate amount, your attorney will be prepared to take the at-fault party to court.
An Insurer Does Not Have to Settle
It’s important to recognize that no insurance company has an inherent duty to settle every claim. The insurer has a responsibility to investigate and decide whether the policyholder is liable or not. If there’s evidence that the policyholder isn’t liable, it will deny the claim. This means if your claim is denied, it’s not necessarily wrong or unfair. You should talk with an attorney about the denial and how to appeal it through the administrative process or file a lawsuit.
Also, even if the insurer agrees the policyholder is liable, it might not settle the claim. It depends on how much the claimant asks for. If you are demanding compensation that significantly exceeds the policy limit, the insurer doesn’t have a duty to agree to that amount. The insurer can and will try to reach a settlement agreement below the policy limit. It will only agree to an amount over the policy limit in certain, rare circumstances.
Did Your Insurer Not Uphold its Duties?
If you are dealing with a claim with your insurance company, and you believe the insurer hasn’t fulfilled its responsibilities, contact a lawyer right away. When your insurer doesn’t uphold its duties under the contract and Illinois law, you might have a claim for bad faith.
During a bad-faith lawsuit, you can demand damages, including attorney’s fees and court costs, in addition to the compensation, you should receive for your initial claim. But to win compensation, you must prove the insurer didn’t fulfill a duty and that its conduct was unreasonable and vexatious.
Talk with a Chicago Lawyer About the Duty of an Insurer
If you were hurt in an accident that was someone else’s fault, we recommend you call a no win no fee lawyer at (312) 236-2900. We are highly experienced accident and injury attorneys who deal with insurance companies daily. We are well-versed in Illinois insurance and administrative law, as well as insurance company policies. Let us use our knowledge and experience to fight for your financial recovery.
Call (312) 236-2900 or use the online form to schedule your free, no-risk consultation.
