Insurance Claims for the General Practitioner

Scott Blumenshine

Get a Free Case Evaluation

Complete the form for a 

free case review


M, Bentley

Thank you for taking my case and being so kind and considerate and never forgetting to update me on where we were in the process. Thank you Scott and Catalina and anyone else that worked on my case.

Natalie A. 

I was in an accident and hired this law firm to represent me, I was very satisfied with the outcome. If I have more legal needs in the future I will give them a call.

Related Content

May 16, 2024

Brain Injury and PTSD

May 15, 2024

Introduction to Jet Bridge Accidents

Our Office

traffic Chicago

177 N. Jefferson St., Suite 203

Chicago, IL 60601

(312) 766-1000

Download Free e-Book - Uninsured, Hit and Run and Underinsured Motorist

Am I Covered ebook

To fully understand what insurance claims cover, and don’t cover, here in Illinois, we have provided an in-depth look into insurance claims. This will help you see all of the different aspects to an insurance claim and why it’s important to get claims filed correctly.

Presented by the ISBA Insurance Law Section Council

“The policy is in the usual form and contains an almost impenetrable maze of verbiage-conditions, definitions, exceptions, additional conditions, supplementary coverages-such as to baffle even a Byzantine theologian.” Economy Fire and Cas. Co. v. Second Nat. Bank of Danville, 91 Ill.App.3d 406, (4th Dist. 1980).

I. Some preliminary thoughts about Insurance and the role of the Insured’s Attorney

The insurance product is unique. Insurance coverage is a key element in a sound financial plan for individuals and businesses. Insurance is marketed as protection against unforeseen risk. An individual or company cannot typically self fund against major losses such as the destruction of a home or a factory. An individual or a business thus pays an insurance company to provide protection against potential major losses. Premium payments are due upon issuance of the policy or perhaps paid on an installment plan. In either event, premium payments are a must.

The only thing the consumer receives from the insurance company is a promise. “Simply put, insurance is the sale of promises. The ‘customer’ pays money now; the insurer promises to pay money in the future if certain events occur.” Warren Buffett in 2013 Annual Report to Shareholders of Berkshire Hathaway, Inc. Major insurers including GEICO and Berkshire Re are core holdings of the company that had $28 billion in income 2013.

The insurance promise is touted as “peace of mind.” The problem is often that the insurer’s promise is filled with many exceptions, exclusions and limitations. Sometimes a legal technicality can turn into a costly mistake, and the law of insurance is saturated with technicalities. Hunt v. State Farm Mut. Auto. Ins. Co., 2013 IL App (1st) 120561 (Ill. App., 2013).

The action on the insurer side thus comes at the claims stage. Insurers gladly accept premium payments month after month and year after year. The test of the promise is when the insured experiences a loss and makes a claim. In the vast majority of claims, the insurer likely pays amounts due. The insured is satisfied. The promise is kept. Attorneys are not called in for that scenario.

In many instances, however, the claim is delayed or denied. At the delay or denial stage, the average insured is at a tremendous disadvantage. The insurer is well resourced in both experience and finances in order to engage in a protracted claim process. The insured is generally both inexperienced and in financial need because of the destruction or loss. The insured needs help. This is where the diligent practitioner can be of great assistance to the needy insured client.

These materials are not meant to be either an exhaustive nor comprehensive discussion of insurance claims processes. The presentation is intended to provide the general practitioner an overview of the insurance claims process and to highlight some key concepts and elements of the successful insurance claim. Citations to some authority are provided.

II. Types of insurance policy claims which the general practitioner may see


  • Home
  • Auto
  • Personal property


  • Buildings
  • Vehicles
  • Business Interruption


  • Death benefit


  • Income replacement

III. Basic Insurance Claim Terms and Concepts

The Policy – the insurance contract aka the insuring agreement

Policy in effect – did loss occur on date that coverage is in effect?

Policy applicable – does policy cover this loss?

Policy limits – how much is payable?

The Insured

Named insured – eg. Joe Doe

Defined insured – eg. “authorized driver”

Proper claimant – eg. property owner v. tenant for contents loss

The Coverage / The Risk

Covered loss – eg. flood v. storm – Hurricane Katrina wind v water

Policy limits – how much

IV. Claims Principles: Insured Obligations

A. Cooperate – clause typically contained in policy

  • Statements
  • Written – report or proof of loss
  • Verbal – recorded, sworn, exam under oath
  • Authorizations
  • Require copies of documents obtained to be provided to you
  • Viewing or taking custody of property
  • Signed receipt
  • No destructive testing
  • To be returned within 60 days
  • Providing documents – be thorough

B. Be timely

  • Do not let limitations period expire!
  • Comply with soft deadlines or request extensions

C. Be thorough and provide support for demand

  • Cite policy language and law.
  • Provide documentation of losses.
  • Present reasoned basis for demands.
  • Ask if other coverage applies or is available.

D. Insist on insurer compliance with insurer duties

  • Sample Cooperation Clause

You must see that the following are done in the event of loss or damage to Covered Property:

  1. Notify the police if a law may have been broken.
  2. Give us prompt notice of the loss or damage. Include a description of the property involved.
  3. As soon as possible, give us a description of how, when and where the loss or damage occurred.
  4. Take all reasonable steps to protect the Covered Property from further damage. If feasible, set the damaged property aside and in the best possible order for examination. Also keep a record of your expenses, for consideration and in the settlement of the claim.
  5. At our request, give us complete inventories of the damaged and undamaged property. Include quantities, costs, values, and amount of loss claimed.
  6. Permit us to inspect the property and records proving the loss or damage.
  7. If requested, permit us to question you under oath at such times as may be reasonably required about any matter relating to this insurance of your claim, including your books and records. In such event, your answers must be signed.
  8. Send us a signed, sworn statement of loss containing information we request to settle the claim. You must do this within 60 days after our request. We will supply you with the necessary forms.
  9. Cooperate with us in the investigation or settlement of the claim.

Case law

It has long been held by courts construing insurance policy provisions imposing duties upon insureds that the insurer’s right to investigate a claim is broad:

“The object of the provisions in the policies of insurance, requiring the assured to submit himself to examination under oath, to be reduced to writing, was to enable the company to possess itself of all knowledge, and all information as to other sources and means of knowledge, in regard to the facts, material to their rights, to enable them to decide upon their obligations, and to protect them against false claims. And every interrogatory that was relevant and pertinent in such an examination was material, in the sense that a true answer to it was of the substance of the obligation of the assured.” Claflin v. Commonwealth Insurance Co., 110 U.S 81 (1884), Passero v. Allstate Ins. Co., 196 Ill.App.3d 602, 554 N.E.2d 384, (1st Dist. 1990)

Where “an insurance policy makes it incumbent on the insured, in the event of a loss, to produce his books or invoices for examination, he must comply with such provision or he cannot recover.” Niagara Fire Insurance Co. v. Forehand, 169 Ill. 626, 629, 48 N.E. 830 (1897).

Production of an insured’s books and records, when requested, is a reasonable condition precedent to recovery. Horton v. Allstate Ins. Co., 467 N.E.2d 284, 125 Ill.App.3d 1034, (1st Dist. 1984) (when the insured completely fails to communicate with the insurer about an accident, a violation of the cooperation clause is patent). Country Insurance Co. v. Bruhn, 289 Ill. App. 3d 241, 250, 682 N.E.2d 366, 224 Ill. Dec. 805 (1997).

Nonetheless, it is well settled that “unless the alleged breach of the cooperation clause substantially prejudices the insurer in defending the primary action, it is not a defense under the contract. This is the test to be employed in our courts in cases where the issue is a breach of the cooperation clause.” M.F.A. Mutual Insurance Co. v. Cheek, 66 Ill. 2d 492, 499-500, 363 N.E.2d 809, 813, 6 Ill. Dec. 862 (1977). Proof of substantial prejudice requires an insurer to demonstrate that it was actually hampered in its defense by the violation of the cooperation clause. M.F.A. 66 Ill. 2d at 500, 363 N.E.2d at 813; State Farm Mutual Automobile Insurance Co. v. McSpadden, 88 Ill. App. 3d 1135, 1138, 411 N.E.2d 121, 123, 44 Ill. Dec. 215 (1980).

Cases since Horton, however, have held that where the insured made some effort to comply with the insurer’s requests for information, but their cooperation was either late or incomplete, the sufficiency of those efforts was a question of fact, and therefore inappropriate for summary judgment. See Crowell v. State Farm Fire & Casualty Co., 259 Ill. App. 3d 456, 460, 631 N.E.2d 418, 197 Ill. Dec. 415 (1994); Patel v. Allstate Insurance Co., 211 Ill. App. 3d 324, 328-29, 570 N.E.2d 357, 155 Ill. Dec. 844 (1991); Piro v. Pekin Insurance Co., 162 Ill. App. 3d 225, 229, 514 N.E.2d 1231, 113 Ill. Dec. 220 (1987). One court stated that whether information required by the policy to be disclosed was wilfully and fraudulently withheld should not be resolved by summary judgment except in “‘the most extreme of cases.’” Piro.

IV. C. Be timely

Limitations periods

The parties to a contract may agree to a shortened contractual limitation period to replace a statute of limitations, so long as it is reasonable. Travelers Casualty v. Bowman, 229 Ill. 2d 461 (2008). In the absence of specific and clear provisions limiting the period within which suits must be filed, the 10-year statute of limitations for actions on written contracts is applicable to actions by insureds against their insurers based on insurnace policies. Dial Corp. v. Marine Office of America, 318 Ill. App. 3d 1056 (2001); Murphy v. United States Fidelity & Guaranty Co. 120 Ill. App. 3d 282 (1983As we suggest hereafter, there may be valid reasons for shortening that limitation period by contract where, as here, a motor vehicle accident is involved. Country Preferred Ins. Co. v. Whitehead, 2012 IL 113365 (Ill., 2012).


The Illinois Insurance Code does contain a tolling provision. The tolling statute extends any limitations period by the length of time between the date proof of loss is filed until the date the claim is denied.

V. Insurer Duty

A. Be fair

B. Be honest

C. Be timely

Sources of insurer duty

a. Case Law

Insurer Obligation of Good Faith and Fair Dealing

Importantly, the law requires good faith and fair dealing by both parties in performing their contractual obligations. Bonner v. Westbound Records, Inc., 76 Ill. App. 3d 736, 744 (1979). Delatorre v. Safeway Ins. Co., 2013 IL App (1st) 120852 (Ill. App., 2013)

Construction of insurance policy language

Recognizing the inherent inequity in bargaining power between the insurer and the insured, Illinois courts have held that if an ambiguity exists in an insurance contract, it will be construed most favorably to the insured. See Squire v. Economy Fire & Casualty Co., 69 Ill. 2d 167 (1977). ‘Ambiguous provisions or equivocal expressions whereby an insurer seeks to limit its liability will be construed most strongly against the insurer and liberally in favor of the insured. Lenkutis v. New York Life Ins. Co., 374 Ill. 136, 28 N.E.2d 86.’ Wolf v. American Cas. Co. of Reading, Pa., 2 Ill.App.2d 124, 118 N.E.2d 777 (1st Dist. 1954). This is a sound rule. It recognizes the realities of the transaction, that is, that the provisions of an insurance policy are not the product of negotiations between insurer and insured but are written by the insurance company and out of necessity, perhaps, submitted for acceptance without change. Id.

b. Statutory

Insurance Code: Section 155 – Fees and Penalties

  1. In any action by or against a company wherein there is in issue the liability of a company on a policy or policies of insurance or the amount of the loss payable thereunder, or for an unreasonable delay in settling a claim, and it appears to the court that such action or delay is vexatious and unreasonable, the court may allow as part of the taxable costs in the action reasonable attorney fees, other costs, plus an amount not to exceed any one of the following amounts:
    1. 60% of the amount which the court or jury finds
      Such party is entitled to recover against the company, exclusive of all costs;
    2. $60,000;
    3. The excess of the amount which the court or jury
      Finds such party is entitled to recover, exclusive of costs, over the amount, if any, which the company offered to pay in settlement of the claim prior to the action.

The statute provides an extracontractual remedy to policyholders whose insurer’s refusal to recognize liability and pay a claim under a policy is vexatious and unreasonable. Kush v. American States Insurance Company, Co. 853 F.2d 1380 (7th Cir. 1988); UNR Industries, Inc. v. Continental Insurance Co., 607 F.Supp. 855, 863 (N.D.Ill.1984). Ordinarily, a policyholder may bring a breach of contract action to recover the proceeds due under the policy. Pursuant to the statute, a plaintiff may also recover reasonable attorney fees and other costs, as well as an additional sum that constitutes a penalty. Cramer v. Insurance Exchange Agency, 174 Ill.2d 513, 675 N.E.2d 897 (1996)

Illinois courts have interpreted Section 155 as the legislature’s “remedy to an insured who encounters unnecessary difficulties when an insurer withholds policy benefits.” Bedoya v. Illinois Founders Ins. Co., 293 Ill.App.3d 668, 688 N.E.2d 757, 228 Ill.Dec. 59 (Ill. App. 1 Dist., 1997); Richardson v. Illinois Power Co., 217 Ill.App.3d 708,.

Determining what constitutes vexatious and unreasonable refusal to defend is a matter for the trial court. Richardson, “It would defeat the purpose of the statute to allow an insurer to escape any penalty when it fails to provide one of the most important benefits of a liability policy–a defense.” Richardson, “Section 155 of the Illinois Insurance Code allows the trial court to make a finding that the insurer’s conduct constituted vexatious or unreasonable delay in any cause where there is an issue of the insurer’s liability on a policy or where the issue revolves around the amount of the loss payable under the policy. * * * The court may consider that the insured was forced to file suit to recover * * * and that the insured was deprived of the use of his property. * * * However, if there is a bona fide dispute about coverage, delay in settling a claim may not violate the statute.” Mohr v. Dix Mutual County Fire Insurance Co., 143 Ill.App.3d 989,

Insurance Code: Improper Claims Practices Act (215 ILCS 5/154.5)

(a) Knowingly misrepresenting to claimants and insureds relevant facts or policy provisions relating to coverages at issue;

(b) Failing to acknowledge with reasonable promptness pertinent communications with respect to claims arising under its policies;

(c) Failing to adopt and implement reasonable standards for the prompt investigations and settlement of claims arising under its policies;

(d) Not attempting in good faith to effectuate prompt, fair and equitable settlement of claims submitted in which liability has become reasonably clear;

(e) Compelling policyholders to institute suits to recover amounts due under its policies by offering substantially less than the amounts ultimately recovered in suits brought by them;

(f) Engaging in activity which results in a disproportionate number of meritorious complaints against the insurer received by the Insurance Department;

(g) Engaging in activity which results in a disproportionate number of lawsuits to be filed against the insurer or its insureds by claimants;

(h) Refusing to pay claims without conducting a reasonable investigation based on all available information;

(i) Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements have been completed;

(j) Attempting to settle a claim for less than the amount to which a reasonable person would believe the claimant was entitled, by reference to written or printed advertising material accompanying or made part of an application or establishing unreasonable caps or limits on paint or materials when estimating vehicle repairs;

(k) Attempting to settle claims on the basis of an application which was altered without notice to, or knowledge or consent of, the insured;

(l) Making a claims payment to a policyholder or beneficiary omitting the coverage under which each payment is being made;

(m) Delaying the investigation or payment of claims by requiring an insured, a claimant, or the physicians of either to submit a preliminary claim report and then requiring subsequent submission of formal proof of loss forms, resulting in the duplication of verification;

(n) Failing in the case of the denial of a claim or the offer of a compromise settlement to promptly provide a reasonable and accurate explanation of the basis in the insurance policy or applicable law for such denial or compromise settlement;

(o) Failing to provide forms necessary to present claims within 15 working days of a request with such explanations as are necessary to use them effectively;

(p) Failing to adopt and implement reasonable standards to verify that a repairer designated by the insurance company to provide an estimate, perform repairs, or engage in any other service in connection with an insured loss on a vehicle is duly licensed under Section 5 301 of the Illinois Vehicle Code;

(q) Failing to provide as a persistent tendency a notification on any written estimate prepared by an insurance company in connection with an insured loss that Illinois law requires that vehicle repairers must be licensed in accordance with Section 5 301 of the Illinois Vehicle Code;

(r) Engaging in any other acts which are in substance equivalent to any of the foregoing.

c. Administrative Code: Illinois Claims Practices



Section 919.50 Required Practices for all Insurance Companies

a) The company shall affirm or deny liability on claims within a reasonable time and shall offer payment within 30 days after affirmation of liability, if the amount of the claim is determined and not in dispute. For those portions of the claim which are not in dispute and for which the payee is known, the company shall tender payment within said 30 days.

1) On first party claims if a settlement of a claim is less than the amount claimed, or if the claim is denied, the company shall provide to the insured a reasonable written explanation of the basis of the lower offer or denial within 30 days after the investigation and determination of liability is completed. This explanation shall clearly set forth the policy definition, limitation, exclusion or condition upon which denial was based. Notice of Availability of the Department of Insurance shall accompany this explanation.

2) Within 30 days after the initial determination of liability is made, if the claim is denied, the company shall provide the third party a reasonable written explanation of the basis of the denial.

b) No company shall deny a claim upon information obtained in a telephone conversation or personal interview with any source unless such telephone conversation or personal interview is documented in the claim file.

c) The company’s standards for claims processing shall be such that notice of claim and proofs of loss submitted against one policy issued by that company shall fulfill the insured’s obligation under any and all similar policies issued by that company and specifically identified by the insured to said company to the same degree that the same form would be required under any similar policy. If additional information is required to fulfill the insured’s obligation under other similar policies, the company may request the additional information. When it is apparent to the company that additional benefits would be payable under an insured’s policy upon receipt of additional proofs of loss from the insured, the company shall communicate to and cooperate with the insured in determining the extent of the company’s additional liability.


Section 919.90 Improper Practices or Procedures – Property and Casualty Companies

a) A claim shall not be denied on the basis of failure to exhibit property unless there is documentation of breach of the policy provisions in the claim file.

b) No company shall make any statement, written or oral, requiring a liability claimant to complete a proof of loss form, accident description, or release of claim for damages, which indicates that the claimant’s rights may be impaired if such forms are not completed within a specified time, unless such statement is given for the purpose of notifying the claimant of the provisions of the statute of limitations.

c) No company shall advise liability claimants to make claims under their own policies in cases where liability is reasonably clear.

d) No company shall fail to effect settlement on first party claims on the basis that responsibility for payment should be assumed by other persons or insurers.

e) No company issuing a motor vehicle insurance policy covering damages to a motor vehicle shall abandon the salvage of a motor vehicle to a towing service and/or storage yard service in lieu of the towing and storage charges, without the agreed permission of the towing service or storage yard service.

f) No company shall deny a claim for storage charges on actual cash value fire and extended coverage losses when the personal property limits have been exhausted, if coverage exists under additional living expense.

Contact Scott Blumenshine at the Blumenshine Law Group for more information.

Need more insurance information? Curious how to deal with other Illinois insurance claims? Here are some other great articles on our site for you to check out:

Understanding “First Party” Bad Faith Insurance Claims in Illinois

Uninsured vs. Under Insured Motorists in Illinois

Benefits of Using a Public Adjuster to Help With Your Insurance Claim

Free Case Consultation

Please provide your information to questions in the form or call



Se habla español

By submitting form you agree to receive email, SMS and phone communication from Blumenshine Law Group. The information contained in the website should not be considered legal advice. The best guidance for your specific legal issue is to contact one of our lawyers.