Illinois Insurer Liability | Staver
Bad Faith

Insurer Liability in Chicago

When you are hurt in an accident, you try to find out who was at fault. After a car crash, you might discover another motorist was speeding and ran a stop sign. After a slip and fall, you might learn the grocery store’s employees ignored a spill for hours. But once you know which person or business is responsible for your injuries, the next issue is how they’re going to compensate you. In many cases, the person or business won’t pay you directly—their insurer will.

After a serious accident, talk with Staver Accident Injury Lawyers, P.C., about pursuing an insurance claim. We’ll talk with you about insurer liability and when you can receive an insurance settlement. You can reach us through our online form or call (312) 236-2900 to set up a free, no-risk consultation.

When Is an Insurance Company Liable for Paying a Claim?

Insurance companies contract with people and businesses to provide monetary coverage for certain events and injuries. For example, with bodily liability and property damage auto insurance, the insurance policy covers accidents in which the insured causes someone else harm. When the events covered in the policy happen, the insurer is liable for paying for the injured party’s damage.

Insurers Investigate Claims

Coverage: Insurers carefully investigate whether the incident is the type of event covered in the policy. For example, property damage auto insurance covers car accidents. It doesn’t apply to natural events, like severe storms or tornadoes.

Fault/Liability: The insurance company scrutinizes whether its policyholder was at fault. It might be true that you were injured in an event covered by the policy. But the insurer might believe there’s evidence that its policyholder wasn’t at fault for the accident. If the insured isn’t legally responsible for your injuries, then the insurer isn’t liable for paying out on the claim.

Damages: It’s not enough to show the insured person or business caused an accident. And you can’t simply claim to have been physically or financially injured—you have to present evidence. You must prove to the insurer that you suffered damages, such as medical bills or damage property.

An Insurer Is Only Liable Up to the Policy Limit

In general, an insurer’s liability is limited to the amount stated in the insurance policy, known as the policy limit. When you file a valid claim against a person’s auto insurance or a business’s liability policy, that insurer has a financial maximum. In a majority of cases, you’ll only receive compensation up to that amount. Demanding you receive more compensation than the policy limit is possible in some circumstances, but it’s not common.

Insurance Companies Want to Pay as Little as Possible

An insurer can pay up to the policy limit, but it likely won’t want to pay the maximum amount on your claim. Insurers are interested in protecting their bottom line. If they can settle your claim for less than the policy limit, they will try to. It’s important to work with an experienced Chicago accident and injury attorney to find out the insurance policy limit and negotiate for the maximum compensation possible.

There Might Be a Reason to Deny Your Claim

Just because the party at fault for your injuries has insurance doesn’t mean the insurer is liable. It depends heavily on the policy language and what happened. It might be that the at-fault person or business has insurance, but that the situation that arose isn’t covered under the type of policy they have.

Other reasons an insurer can deny your claim include:

  • If the policyholder lapsed on paying their premiums, then there might not have been any insurance coverage at the time of the accident.
  • The insured’s actions might have violated the terms of the policy. For example, an auto insurance policy might not cover damages caused by intoxicated driving, and you were hurt in a DUI accident.
  • An insurer can deny claims for more technical reasons, too, like if you didn’t provide notice of the accident right away.
  • The insurer can claim you misrepresented facts, like the severity of your injuries.
  • The insurer could claim you didn’t mitigate your damages if you didn’t seek medical attention after the accident or follow the doctor’s orders.
  • An insurer can claim that you or other parties share a majority of responsibility for the accident, and not its policyholder.

An Insurer’s Responsibility to Act in Good Faith

What’s to stop an insurer from denying your valid claim? Illinois law requires the insurer to act in good faith. When you file a formal claim, the insurer must assign someone to investigate. It must, within a reasonable amount of time, gather evidence to evaluate coverage, liability, and damages. Illinois law even has specific deadlines for various situations that an insurer must abide by.

Based on Illinois law and the insurance policy, the insurer has to make an honest decision about whether it is liable for paying the claim or not. If it’s liable for paying the claim, it must try to settle to protect the insured from a lawsuit.

When You Can Bring a Bad Faith Claim

Despite the insurer’s liability under its contract with the policyholder and Illinois law, some companies don’t follow the rules. Insurance companies have been known to not adequately investigate a claim, create unreasonable delays, and perform other bad faith acts.

In Illinois, when an insurer violates the requirement to act in good faith, the insured can file a lawsuit against the company. That’s because the insurer’s poor conduct puts the policyholder at risk of being sued and help personally responsible for damages.

If you’re a third-party claimant, which means you’re dealing with a claim with another person or business’s insurance, then you don’t have the right to file a third-party lawsuit. When the insurer isn’t treating you fairly, then your lawyer will represent you in a lawsuit against the insured. We’ll fight to win you a judgment for compensation against the party at-fault for the accident and injuries.

In many circumstances, the policyholder whose insurance company acted in bad faith will assign you the right to pursue the bad faith claim against the company. That is how you can demand that your judgment be paid by the insurer.

Talk with a Chicago Attorney About Insurance Coverage

After being seriously hurt in an accident that was someone else’s fault, talk with an attorney from Staver Accident Injury Lawyers, P.C., as soon as you can. You’ll benefit from having a lawyer investigating the circumstances. This helps you figure out who was directly at fault, which people or businesses are liable for your injuries, and whether the responsible parties have insurance. When there’s insurance coverage, an attorney will aggressively seek an insurance settlement.

To schedule a free consultation with Staver Accident Injury Lawyers, P.C., use our online form or call (312) 236-2900.

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(312) 236-2900
(312) 236-2900
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