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3 Ways The Illinois Consumer Fraud Act Protects Insurance Policyholders

Written by Jared Staver

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Jared Staver is a Personal Injury Lawyer based in Chicago, Illinois and has been practicing law for over 20 years.

Jared Staver

CATEGORY: Auto Accidents, Personal Injury


The Illinois Consumer Fraud and Deceptive Practices Act makes unfair and misleading practices illegal, forcing companies to act honestly and above board when selling you products and handling disputes. While there are specific laws insurers must follow, these companies are also businesses and as a policyholder, you are a consumer of their products. The Illinois Consumer Fraud Act protects you as an insurance policyholder as it would when you buy products from any other company.

If you believe you have been treated unfairly or that your insurance company has committed fraud, you should contact an experienced Chicago insurance attorney at Staver Accident Injury Lawyers, P.C. at (312) 236-2900. We can analyze your situation and explain your rights and legal options.

What the Consumer Fraud Act Covers

It is important to note that Illinois law protects you from more than a business’s intentional fraudulent acts. Companies can also be held liable for omissions of fact and careless misrepresentations that would confuse you or leave you uninformed. Under the Consumer Fraud Act, businesses can be prosecuted for specific violations of the act, willful and knowingly deceptive acts or misrepresentations, and the concealment or suppression of important information.

How the Consumer Fraud Act Protects Policyholders

You purchase insurance policies from companies like you would purchase a product from any other business, and you deserve the same amount of protection in each situation. When the Consumer Fraud Act is viewed through an insurance lens, it is clear to see that the act protects you by prohibiting insurers from:

  1. Using deception fraud, false pretenses, or false promises to sell a policy:

    Insurance companies cannot lie or make false promises about the policy. They cannot lie about their duties as an insurer or your duties as the insured. The insurer must be honest about the cost of the policy, when the policy applies to incidents, and how much the policy can pay out.

  2. Misrepresenting or concealing facts about the policy during a sale or claims dispute:

    Most insurance issues arise when there is a first- or third-party claim made against the policy. Because of the Consumer Fraud Act and other laws, insurers must act fairly during any claims process. They cannot conceal or misrepresent the policy to you during the claims process to gain the upper hand and not pay out a valid claim.

  3. Fraudulently denying a valid claim:

    An insurance company is required to uphold the policy and pay out when you have paid all of the necessary premiums and properly made a valid claim against the policy. It also has a duty to uphold the policy when a third-party makes a valid claim against the policy, though the insurer may only have a duty to settle in certain circumstances.

Recoverable Damages Under the Consumer Fraud Act

If you successfully prove in court that your insurance company violates the Illinois Consumer Fraud Act, you may be able to recover:

  • Actual economic damages
  • Attorneys’ fees
  • Court costs
  • Punitive damages

A Chicago Insurance Lawyer Can Help

Your insurance company does not have the right to take advantage of you or make you liable for damages it should have covered. If you believe your insurance company has been deceptive or unfair in handling your policy or claim, call Staver Accident Injury Lawyers, P.C. at (312) 236-2900 or contact us online to schedule a free consultation.

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