Illinois Bad Faith Insurance Law (215 ILCS 5/155)

Last Updated on August 20, 2026 by Patrick A. Salvi II

You purchased insurance and pay your monthly premiums so you’ll be protected in the event of a covered event. Now that you have a claim, the insurance company is dragging its feet and refusing to pay. Maybe the insurer is offering you less than the fair value of your claim. Perhaps it is saying that you need to provide additional paperwork that you have already submitted. Maybe it is just stonewalling you, refusing to respond to your calls or emails in a timely fashion.

If your insurance company refuses to process your claim in a reasonable fashion, it may be in violation of Illinois law. Under 215 ILCS 5/155, you may be entitled to demand penalties, interest, and attorney fees from the insurer on top of the money it owes you under the terms of your policy.

What is the Illinois Bad Faith Law (215 ILCS 5/155)?

Chapter 215 of the Illinois Compiled Statutes (ILCS), Section 5/155 is a part of Illinois bad faith insurance law. It penalizes an insurance provider for a “vexatious and unreasonable delay” in paying a claim. Section 155 is not a separate cause of action from a breach of contract claim. Rather, it is meant to incentivize the prompt handling of insurance claims by forcing insurers to pay penalties to their policyholder when they delay claims unreasonably or issue unjustified denials.

In this context, an insurance company’s conduct is vexatious and unreasonable if it violates Chapter 50 of the Illinois Administration Code, Section 919.50(a)(1). This law requires insurers to investigate claims promptly and pay valid claims within 30 days of affirming liability. If an insurer denies a claim or insists that it owes the policyholder less than the amount sought, the insurer must provide a written explanation for its decision within 30 days of completing its investigation. It must specify the policy language that was the basis for its decision.

To put it in plain English, your insurer may have breached its contractual duty to you as a policyholder if it has neither approved your claim nor provided you with a written explanation of its denial or counteroffer within 30 days of investigating the claim. If the insurer has breached its legal obligations to you, then it could owe you the fair value of the claim as well as additional financial penalties.

Examples of “Vexatious and Unreasonable” Insurance Tactics

Here are some common insurer tactics that may be considered vexatious and unreasonable under Section 155:

Unreasonable Delays After a Car Accident – You are dealing with expensive medical bills and repair costs after a car crash. But your insurer says it does not have enough information to process your claim and engages in improper claims practices to delay payment. Note that Section 155 applies to first-party insurance policies such as health insurance, life and casualty insurance, and other policies that cover the policyholder’s own losses. Section 155 does not apply to third-party claims like those against an at-fault driver’s liability coverage.
Wrongful Denials and Lowball Settlement Offers – The insurance company points to vague contract language or misconstrues limitations to convince you that you do not have the coverage you think you have. It then uses this as an excuse to deny your claim or offer you a low settlement offer, arguing that it is all you are entitled to.
Failure to Adequately Investigate Your Claim – The insurance company might not fully investigate your claim to avoid having to accept liability. For example, it might not follow up with eyewitnesses or request the full police incident report, relying on a preliminary version instead.

If you notice such tactics, it might be time to contact a bad faith insurance lawyer who has experience handling Section 155 claims.

What Compensation Can You Recover in an Illinois Bad Faith Lawsuit?

If your insurance provider acted in bad faith by unreasonably denying or delaying your claim, you can pursue an action for breach of contract against the insurer. If successful, you can recover the original policy benefits for the fair value of your insurance claim. Section 155 may also require the insurance company to pay you penalties.

While Section 155 does not specifically define what counts as a “vexatious and unreasonable” delay, it is clear about what your insurer has to pay you because of the insurer’s conduct:

Attorney Fees and Court Costs – The amount of money the policyholder has had to pay out of pocket to pursue the bad faith insurance claim
Statutory Penalties – Up to $60,000 or 60 percent of the judgment against it, whichever is less

How to Prove Your Insurance Company Acted in Bad Faith

To win your bad faith claim and recover additional money under Section 155, you will need to prove that your insurance provider acted unreasonably when handling your claim. This may require evidence such as the following:

The contractual language of the insurance policy – Establishes the insurer’s contractual obligations and whether the claim meets the coverage requirements
Communications with the insurer – All written and verbal communications documenting how the insurer handled the claim and whether it responded promptly and accurately
A timeline of the insurer’s handling of the claim – A chronological record of the insurer’s actions from first notice of loss through claim resolution, highlighting inactivity, missed deadlines, and unreasonable delays
The insurer’s claim file – Internal documents showing how the insurer evaluated your claim, what information it considered, and how it came to its decision
Evidence of bias or predetermined claim outcomes – Information suggesting the insurer decided the outcome before completing a fair investigation
Claims handling policies and business practices – Internal materials regarding the insurer’s standards, procedures, incentives, or systemic practices affecting claim handling
Independent evaluations and expert opinions – Third-party evidence establishing the cause, extent, or value of the loss

Fortunately, you do not have to gather all this evidence on your own. Instead, you can turn to a Chicago insurance bad faith attorney who knows the Illinois insurance code and can pursue your claim effectively. Your attorney can file a bad faith insurance lawsuit, handle settlement negotiations, and pursue the full amount you are entitled to under the law.

Obtain a Free Consultation with a Chicago Bad Faith Insurance Attorney

Contact Salvi, Schostok & Pritchard P.C. if you suspect that your insurance provider has unfairly delayed or denied your legitimate claim. Our law firm has years of experience standing up to insurance companies and pursuing bad faith insurance cases. We will meet with you during a free consultation and explain what we can do to demand justice on your behalf.