Bad Faith Denial of UM/UIM Claims in Illinois

Last Updated: April 4, 2026

Bad faith occurs when an insurance company denies a valid UM/UIM claim without proper investigation or for reasons not supported by the policy; you can sue for bad faith and recover the claim amount plus penalties and attorney fees. Document all denials and communications.

Home > Blog > Bad Faith Denial of UM/UIM Claims in Illinois

Your Insurer Has a Duty of Good Faith

When you file a UM or UIM claim, you are asking your own insurance company to pay benefits you purchased. Unlike a third-party liability claim, your insurer owes you a contractual duty to handle your claim fairly and in good faith. When an insurance company unreasonably denies, delays, or undervalues a UM/UIM claim, it may be acting in bad faith under Illinois law.

Bad faith by an insurance company is a serious matter. Under 215 ILCS 5/155, Illinois courts can award additional damages against insurers that engage in vexatious and unreasonable conduct in handling claims.

Common Examples of Bad Faith in UM/UIM Claims

Bad faith can take many forms in the UM/UIM context. Some of the most common tactics include unreasonable delays in investigating or processing the claim, denying a claim without a legitimate basis, failing to communicate the reason for a denial, offering far less than the claim is clearly worth, ignoring or refusing to consider medical evidence, misrepresenting the terms of the policy to reduce coverage, and refusing to pay an arbitration award promptly.

Insurance companies sometimes use delay as a strategy, hoping that injured policyholders will accept a lowball settlement out of financial desperation. Others may dispute the connection between the accident and your injuries, even when the medical evidence is clear.

Proving Bad Faith Under Illinois Law

To establish a bad faith claim under Section 155, you generally need to show that your claim was covered under the policy, that your insurer’s conduct in handling the claim was unreasonable, and that the insurer lacked a reasonable basis for its position. You do not need to prove that the insurer acted with malice, only that its conduct was objectively unreasonable.

If successful, remedies under Section 155 can include the amount owed under the policy, reasonable attorney fees and costs, and an additional penalty of up to $60,000. In cases involving particularly egregious conduct, punitive damages may also be available under common law bad faith theories.

Protecting Yourself Against Bad Faith Tactics

Document everything. Keep copies of all correspondence with your insurer, including letters, emails, and notes of phone conversations. Follow up verbal communications with written confirmation. Keep records of all deadlines and response times. If your insurer asks for medical records or other documentation, provide it promptly and keep proof that you did so.

If your insurer denies your claim or makes an unreasonably low offer, do not accept it without consulting a personal injury attorney. An experienced lawyer can evaluate whether your insurer’s conduct rises to the level of bad faith and advise you on the best course of action.

When to Contact an Attorney

If your UM/UIM claim has been denied, if your insurer is dragging its feet, or if the settlement offer is far below the value of your injuries, contact Parker & Parker right away. We represent policyholders throughout Central Illinois in UM/UIM disputes and bad faith insurance claims. Call us at (309) 674-0044 for a free consultation.

Injured? Get a Free Case Review.

The personal injury attorneys at Parker & Parker have been fighting for accident victims in Peoria and across Central Illinois for over 25 years. Call (309) 674-0044 or contact us online for a free, no-obligation consultation.

Frequently Asked Questions

What is bad faith in a UM/UIM claim?

Bad faith occurs when your own insurance company unreasonably denies, delays, or undervalues your UM/UIM claim. Under Illinois law (215 ILCS 5/155), insurers that act in bad faith can be required to pay additional penalties and attorney fees.

What can I recover in a bad faith insurance claim in Illinois?

If your insurer acted in bad faith, you may recover the amount owed under your policy, reasonable attorney fees and costs, and an additional statutory penalty of up to $60,000. Punitive damages may also be available in egregious cases.

How do I know if my insurer is acting in bad faith?

Warning signs include long delays without explanation, denial of your claim without a legitimate reason, lowball settlement offers, failure to investigate your claim, and misrepresenting your policy terms.

Dealing with injuries after a car crash can feel overwhelming. Our our Peoria personal injury team can guide you through every step of the legal process.

Need a lawyer? This article is part of our Peoria Car Accident Lawyer practice area. Call Parker & Parker at 309-673-0069 for a free consultation.