Starting July 1, 2027, Illinois motorists are set to gain a new way to contest disputed valuations on auto damage claims outside the courtroom.
Under a new state law, some auto insurance policies will have to spell out an appraisal process for cases where a carrier's loss figure differs from a repair estimate.
Here's what to know
CollisionWeek reported that Gov. JB Pritzker approved House Bill 4160 on Aug. 7. That legislation is now Public Act 104-0767, adds Section 398 to the Illinois Insurance Code, and is set to take effect on July 1, 2027.
The law applies to policies that include first-party physical damage coverage, which generally protects damage to a driver's own vehicle, such as collision or comprehensive coverage.
As of that date, affected policies will need to provide an appraisal mechanism for disputes about the value of a loss. That means vehicle owners and collision repair facilities will have a formal, binding way to address a mismatch between an insurer's valuation and a repair estimate without resorting to litigation.
More background
If an insurer's estimate comes in below a shop's documented repair cost, vehicle owners may face delays, out-of-pocket expenses, or the prospect of a legal fight.
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In other words, covered policies will have to include this method for settling valuation disputes as a matter of state law.
The law does not take effect until July 1, 2027, giving insurers time to update policy forms and internal claims procedures, while drivers, repair shops, and consumer advocates have time to understand how the new right may work in claim disputes.
The measure does not eliminate disagreements over repair costs, nor does it guarantee that every driver will receive a higher payout.
Instead, it establishes a clearer way to address a frequent source of frustration in auto insurance: how much an insurer estimates a physical damage loss is worth.
What's being done?
The requirement that covered policies contain appraisal language is meant to provide a more uniform process for disputes over loss amounts.
Photos, written estimates, repair supplements, and communications with both the insurer and the repair shop could become important if there is a dispute over what a covered repair should cost.
Repair facilities could also benefit from a more clearly defined framework for documenting and defending their estimates, which may reduce prolonged back-and-forth over claim values and help some vehicles be repaired and returned to the road faster.
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