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House Bill 5559 was signed by Gov. J.B. Pritzker and is now
Illinois law. The law mandates car insurance companies explain
in detail how they decided a car involved in a wreck was total
loss.
Opponents had raised concerns about the burdens on auto insurers
and the additive costs to customers, but ultimately the bill was
approved unanimously in both chambers.
State Rep. Rep. Tracy Katz Muhl, D-Buffalo Grove, said the
bill’s goal was to increase transparency around how car insurers
come to a decision to consider a vehicle a total loss.
“So this agreed upon bill is about showing your math. We want to
add transparency to help people understand the components of a
decision to total your car, typically the current market value,
the estimated cost to repair and the salvage value,” said Katz
Muhl.
Katz Muhl pointed to a recent Illinois Department of
Transportation study that revealed nearly 300,000 car crashes
happen in Illinois per year and of those, 75,000 result in at
least one car being totaled.
“For that roughly 75,000 families, it’s a financial catastrophe
exacerbated by the opacity in the process of understanding how
that calculation was made," she said.
State Sen. Julie Morrison, D-Lake Forest, carried the measure in
the Senate and explained that upon the determination of a total
loss of an insured vehicle, the insurance company needs to
provide the insured with a brief description of how that
determination was made.
“This must include any available repair estimate, estimated
vehicle salvage value, assessed market value and other costs and
calculations used,” said Morrison.
It appears the Illinois Insurance Association initially opposed
the measure, but Katz Muhl said she was proud to get the
insurers and auto body interest groups on board with the bill.
“We are excited to have worked with all of the consumer
advocates, the body shop community and insurance
[stakeholders],” said Katz Muhl.
It is not known if the Illinois Insurance Association removed
their opposition. The Center Square could not immediately
confirm with the association.
The law takes effect Jan. 1, 2025.
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