Illinois Administrative Code
Title 50 - INSURANCE
Part 919 - IMPROPER CLAIMS PRACTICE
Exhibit A - Total Loss Automobile Claims

1) Total Loss Claims

When you are involved in an automobile accident, one of the first things you may have to do is file a claim for damages to your vehicle. If your car is a total loss, this procedure can sometimes be confusing.

Your automobile insurance policy requires both you and your insurance company to follow certain steps after a loss occurs. This publication summarizes those requirements and outlines your rights.

The Illinois Department of Insurance has established regulations to protect you when you file an insurance claim. It is also important that you read your policy carefully so that you clearly understand your responsibilities.

If you still have questions, you can contact our Consumer Services Section by phone at (866) 445-5364 or at one of the following locations:

320 West Washington Street

Springfield, Illinois 62767

OR

122 S. Michigan Ave., 19th Floor

Chicago, Illinois 60603

2) Your Duties

3) Your Insurance Company's Duties

When you file an automobile insurance claim, your insurance company has three options:

4) Replacement

If the insurance company elects to replace your vehicle, the replacement must be a specific make and model comparable to your totalled vehicle, and it must be available in as good or better overall condition than your totalled vehicle.

Replacement vehicles must be purchased through licensed dealers. Vehicles that are no more than three years old must be warranted.

If you reject a replacement vehicle, the insurance company must pay only the amount it would have otherwise paid for the replacement vehicle including applicable taxes, transfer and title fees. The company must offer you the replacement vehicle and you must reject the offer.

If you desire a replacement vehicle of similar value, this replacement method is also permitted.

5) Cash Settlement

If the insurance company elects to make a cash settlement for your totalled vehicle, they must first determine its retail value. Companies normally use guide books or computerized data marketed by various sources.

If your vehicle is not listed in one of these sources, the company can use written dealer quotes. Ordinarily, however, newspaper advertisements are not acceptable sources of market value.

6) Payment of Sales Tax

If within 30 days of a cash settlement, you can prove that you have purchased another vehicle, the company must pay the applicable sales tax, transfer and title fees in an amount equivalent to the value of the total loss vehicle. If you purchase a vehicle with a market value less than the amount previously settled upon, the company must pay you only the amount of sales tax that you actually incurred and include transfer and title fees.

Your insurance company must give you written notice of this procedure.

7) Betterment Deductions

The insurance company is allowed to make deductions from the retail value if your automobile has old, unrepaired collision damages. There is no limit to the amount of the deduction.

The insurance company can also make deductions for wear and tear, missing parts and rust, but the maximum deduction may not exceed $500.00.

All deductions must be itemized and specified as to dollar amount.

8) Retaining Your Totalled Vehicle

In an effort to minimize automobile "chop shop" crime, the Illinois Vehicle Code does not permit you the right to retain the salvage once your automobile has been deemed a total loss by your insurance company. The insurance company must take possession of the vehicle, if the vehicle is eight model years or newer.

9) Right of Recourse

If you cannot locate a replacement vehicle within 30 days of receiving a cash settlement, you may have some additional rights under your insurance contract.

If you cannot purchase a substantially similar vehicle for the market value determined by the company, but you have located a substantially similar vehicle that costs more, the following procedures shall apply.