What You Need to Know About Reasonable Promptness

The term “Reasonable Promptness” is defined in Section 154.6(b) of the Illinois Code [215 ILCS 5/154.6(b)] as responding to communications from a claimant or insured within a maximum of 15 working days. This ensures that all inquiries and issues are addressed swiftly to maintain transparency and trust.

The Importance of Prompt, Fair, and Equitable Claim Settlements

Under the Illinois Administrative Code, insurers are required to conduct a prompt investigation into any claims. This investigation covers all activities related to determining liability based on the coverage provided by the policy. The investigation must show a bona fide effort to communicate with all involved parties where eligibility is reasonably clear, within 21 working days after receiving a notification of loss (See Ill. Admin. Code tit. 50, § 919.40).

Standards for Timely Settlements

Section 7 of the Illinois Code outlines the standards for settlements:

• Acceptance or Denial: Within 21 days of receiving properly executed proofs of loss, the insurer must inform the first-party claimant of the claim’s acceptance or denial. If a claim is denied based on a specific policy provision, condition, or exclusion, this must be clearly referenced in the written denial, with all documentation maintained in the claim file as per Section 4.

Timelines for Payment

Insurers must affirm or deny liability on claims within a reasonable timeframe and offer payment within 30 days of affirming liability, provided the amount of the claim is determined and not in dispute. If portions of the claim are undisputed and the payee is known, payment must be tendered within 30 days (See Ill. Admin. Code tit. 50, § 919.50(a)).

Providing Explanations

For first-party claims, if a settlement offer is less than the claimed amount or if the claim is denied, the insurer must provide a reasonable written explanation of the basis for the lower offer or denial within 30 days after the investigation and determination of liability is completed (See Ill. Admin. Code tit. 50, § 919.50(a)(1)).

Understanding these regulations helps ensure that you are informed about your rights and the insurance company’s obligations. Should you have any questions or need further clarification, please consult a licensed attorney for legal advice.

At Central Adjusting Group LLC, we are committed to assisting our clients with utmost professionalism and efficiency, ensuring all claims are managed promptly and equitably.