Insurance companies have many reasons why they would deny or pay a claim. One of the most common reasons is if the insurance company disputes the liability (fault) of their insured driver. Because Illinois law employs the doctrine of modified comparative fault, the plaintiff (injured person) will be compared to other parties in the accident, and if the plaintiff’s fault is less than 50% they may recover damages (in proportion to the amount of fault attributable to the plaintiff). 735 Ill. Comp. Stat. 5/2-1116(c). However, if the plaintiff’s contribution of fault to the accident is more than 50% they will be barred from recovery. 735 Ill. Comp. Stat. 5/2-1116(c).
An example of this is when a plaintiff and a defendant get in an automobile accident, and the plaintiff sustains injuries costing $100,000. Nevertheless, it is found that the plaintiff was 70% at fault for the accident. In this case, the plaintiff would not be able to recover from the defendant or their insurance company. On the other hand, if the plaintiff was only 30% at fault for the accident, the plaintiff may recover $70,000 for their injuries ($100,000 minus their 30% fault) because they are less than 50% at fault.
Other reasons that insurance companies may deny claims are: the company believes the injuries you sustained in the accident were prior injuries, the police report does not indicate you had any complaints of pain, the insurance company was not promptly notified of the accident, and the at-fault party does not have enough coverage to pay for the damages (partial denial).
Denial of an insurance claim is common. In order to know if your claim was properly denied, it is best to consult an experienced Illinois attorney. An attorney will assist you in determining whether there was an unreasonable denial of the claim, or unreasonable delay by the insurance company in settling the claim, in which, the insurance company may be held liable. 215 Ill. Comp. Stat. 5/155(1). Additionally, if the insurance company refuses to settle and bad faith is found, punitive damages may be awarded.[1]