“Reasonable Written Explanation”

“Reasonable Written Explanation”

Failure to Provide “Reasonable Written Explanation” Supports Finding of Section 155 Damages



The following decision from the second district appellate court is a nice victory for policyholders in Illinois…


My take: Carriers cannot simply respond to a proof of loss by saying it is too high. As the policyholder’s expert testified:

“It was incumbent on defendant to estimate the damages and propose a settlement amount, which is consistent with section 919.50 of the Illinois Admin. Code. . .In other words, the policy placed the burden of determining liability on defendant, but defendant improperly tried to shift the burden to plaintiff.”

The court correctly followed Illinois precedent that evidence of a carrier’s improper claims practice under section 919.50 supports a finding of vexatious and unreasonable conduct under Section 155 of the Illinois Insurance Code.





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