An insurance policy is a contract between an insurance company and an insured. An insured who believes that the insurance company has failed to fulfill its obligations under the insurance contract has certain remedies available to them. First, the insurance company might be liable for breaching the terms of the insurance contract. In such cases, though, the insured is limited to recovering only those damages available in a traditional breach of contract suit. For instance, if the dispute is over repairs to a vehicle that total $1,000, the amount that might be awarded in a breach of contract case would generally be limited to that amount. This limited recovery might dissuade insureds from pursuing causes of actions against insurance companies.

To address this concern, the Illinois legislature enacted a statute intended to provide insureds with a recovery that is not limited to the insurance contract itself. Section 155 of the Illinois Insurance Code provides for additional “taxable costs” for an insurance company’s unreasonable and vexatious failure to fulfill its contractual and legal obligations to its insureds. These taxable costs include reasonable attorney’s fees and an amount not to exceed any one of the following amounts: 60% of the amount which the court or jury finds the insured is entitled to recovery against the insurance company, exclusive of all costs; $60,000; or the excess of the amount which the court or jury finds the insured is entitled to recover, exclusive of costs, over the amount, if any, which the insurance company offered to pay in settlement of the claim prior to the action.

Section 155 is the most frequently cited by insureds seeking recovery from an insurance company outside the insurance contract. Other potential avenues for recovery outside of the insurance contract including a claim under the Illinois Consumer Fraud and Deceptive Business Practice Act, which generally protects consumers by outlawing certain deceptive or misleading actions, or a cause of action for common law fraud (although this type of action might be difficult for an insured to prove).

If you have a question about your insurance claim, reach out to the experienced attorneys at Mag Mile Law at 708-576-1624 or [email protected].