Illinois body shop laws: what insurers and shops must do

What it means in Illinois

No rule in our Illinois collection bars an insurer from requiring or recommending a shop beyond a travel limit: under the private passenger auto claims rule, the insurer can't make your customer travel unreasonably for an estimate or to a shop it recommends. If an insured's own written estimate is higher than the insurer's, the insurer must respond promptly and name a shop that will do the repair properly. If it doesn't, it must promise in writing to pay all reasonable costs above its estimate.

No rule in our Illinois collection bars an insurer from requiring or recommending a shop beyond the travel limit. This is a claims-practice rule for private passenger auto.

The law's own words

“The company shall not require the insured or claimant to travel unreasonably either to obtain a repair estimate or to have the vehicle repaired at a specific repair shop that is recommended by the company.”

50 Ill. Adm. Code 919.80, effective 7/22/2002

“If the insured subsequently claims, based upon a written estimate which he obtains, that necessary repairs will exceed the written estimate prepared by or for the company, the company shall review and respond promptly to the insured and provide the insured with the name of a repair shop that will make the repairs in a workmanlike manner.”

50 Ill. Adm. Code 919.80, effective 7/22/2002

“Failure of the company to so inform the insured of the name of such a repair shop shall require the company to provide written notice to the insured that any and all reasonable costs incurred for repair or replacement related to the partial loss in excess of the company's estimate will be reimbursed by the company.”

50 Ill. Adm. Code 919.80, effective 7/22/2002

What it means in Illinois

Before the insurer stops paying storage, it must give your customer, the insured, enough notice to move the car and note it in the claim file. It also can't abandon a salvage car to a tow or storage yard in place of paying the bill unless the yard agrees. On your side, send certified-mail notice to the lender on the title before any storage fees start. Skip it and you can't collect storage, and the lender can get the car back without paying any.

The lienholder-notice rule does not apply to a municipality of 1,000,000 or more seeking storage fees. The insurer notice runs to an insured.

The law's own words

Shop

“Any person, firm, or private corporation seeking to impose fees in connection with the furnishing of storage for a vehicle in the person's, firm's, or corporation's possession must provide written notice, by certified mail, return receipt requested, to the lienholder of record prior to the assessment and accrual of such fees, regardless of whether it enforces a lien under this Act.”

770 ILCS 45/1.5, effective 11/23/2017

Shop

“If a person, firm, or private corporation fails to comply with the notification requirements set forth in subsection (a) of this Section, storage fees shall not be assessed and collected and the lienholder shall be entitled to injunctive relief for possession of the vehicle without the payment of any storage fees.”

770 ILCS 45/1.5, effective 11/23/2017

Insurer

“The company shall provide reasonable notice to an insured prior to termination of payment for automobile storage charges and document such notice in the claim file. Reasonable notice shall constitute sufficient notice to the insured to allow them to remove the vehicle from storage prior to the termination of payment.”

50 Ill. Adm. Code 919.80, effective 7/22/2002

Insurer

“No company issuing a motor vehicle insurance policy covering damages to a motor vehicle shall abandon the salvage of a motor vehicle to a towing service and/or storage yard service in lieu of the towing and storage charges, without the agreed permission of the towing service or storage yard service.”

50 Ill. Adm. Code 919.90, effective 1/11/1989

What it means in Illinois

Illinois has two lien laws. For bills of $2,000 or less, the lien lasts until you voluntarily release the car; if it isn't redeemed within 90 days after the work, you can sell it after 30 days' newspaper notice and a certified letter. The general law keeps the lien for a year after the work even if the car leaves, but only if you file a lien notice with the county recorder within 60 days after release. Under the general law a lender recorded before your work comes first, and you can't charge storage until you've sent the lender on the title a certified letter.

The bond or deposit release applies only after the shop chooses the sheriff-sale route under 45/6. Liens of $2,000 or less under 770 ILCS 50 also need certified-mail notice 30 days before sale. A collision repair facility that did not follow the Collision Repair Act has no lien for unauthorized parts or labor.

The law's own words

Keep the car

“Every person, firm or corporation who has expended labor, skill or materials upon any chattel, or has furnished storage for said chattel, at the request of its owner, reputed owner, or authorized agent of the owner, or lawful possessor thereof, shall have a lien upon such chattel”

770 ILCS 45/1

Keep the car

“Every person expending labor, services, skill or material upon or furnishing storage for any chattel at the request of or with the consent of its owner, authorized agent of the owner, or lawful possessor thereof, in the amount of $2,000 or less, shall have a lien upon such chattel”

770 ILCS 50/1

Sell or title it

“Unless the chattel is redeemed within 90 days of the completion of the expenditure of such labor, services, skill, or material or furnishing of storage, or within 90 days of the date agreed upon for redemption, the lien may be enforced by a commercially reasonable public or private sale conducted so as to maximize the net proceeds of said sale as hereinafter provided.”

770 ILCS 50/2

Sell or title it

“Such sale shall be held only after giving 30 days' notice of the time and place of such sale, by publication once in some newspaper of general circulation”

770 ILCS 50/3

Get it back

“any defendant may, in lieu of the bond of surety above provided for, deposit with the sheriff a sum of money equal to the amount of claimant's lien, together with an additional sum of $50, the moneys to be held in lieu of such bond and from which sums claimant's judgment may be paid.”

770 ILCS 45/6

What it means in Illinois

In Illinois, the insurer can't specify non-OEM aftermarket crash parts, and you can't install them, unless your customer is told in writing. The insurer's estimate must identify each such part and carry a notice that the parts maker or distributor provides the warranty. Your estimate must label major parts as new, used, rebuilt or reconditioned, or aftermarket. By rule, the insurer can't require crash parts that aren't at least equal in like kind and quality to the original.

Non-OEM aftermarket crash parts must carry the maker's logo or name, visible after installation when practicable. The 919.80 crash parts standard is part of the rules on automobile claims the insurer pays on its insured's vehicle.

The law's own words

Insurer

“No insurer shall specify the use of non-OEM aftermarket crash parts in the repair of an insured's motor vehicle, nor shall any repair facility or installer use non-OEM aftermarket crash parts to repair a vehicle unless the customer is advised of that fact in writing.”

215 ILCS 5/155.29

Insurer

From a list that begins: “In all instances where an insurer intends that non-OEM aftermarket crash parts be used in the repair of a motor vehicle, the insurer shall provide the customer with the following information:”

“(1) a written estimate that clearly identifies each non-OEM aftermarket crash part; and”

215 ILCS 5/155.29

Parts standard

From a list that begins: “a disclosure settlement incorporated into or attached to the estimate that reads as follows:”

“Warranties applicable to these replacement parts are provided by the manufacturer or distributor of these parts rather than the manufacturer of your vehicle.”

215 ILCS 5/155.29

Shop

“(c) Motor vehicle collision repair facilities shall describe in the estimate the major parts needed to effectuate the repair and shall designate the parts as either new parts, used parts, rebuilt or reconditioned parts, or aftermarket parts as set forth in Section 10 of this Act.”

815 ILCS 308/15, effective 1/1/2004

Parts standard

“No insurer shall require the use of replacement crash parts in the repair of an automobile unless the replacement crash part is at least equal in like kind and quality to the original part in terms of fit, quality and performance. Insurers specifying the use of replacement crash parts shall consider the cost of any modifications which may become necessary when making the repair.”

50 Ill. Adm. Code 919.80, effective 7/22/2002

What it means in Illinois

Illinois doesn't require an appraisal clause. On a private passenger total loss, if your customer can't buy a comparable car for the settlement within 30 days of getting the check, the insurer must reopen the claim; it may then choose to settle under the policy's appraisal section, which binds both sides. That choice is the insurer's, not your customer's. If your customer's repair estimate is higher, the insurer must name a shop or promise in writing to pay reasonable costs above its estimate.

919.80's total loss recourse and estimate rules apply to private passenger auto claims and speak of the insured. Appraisal is one of several options the company may choose, and none is required if it gave written notice of a specific available comparable vehicle at settlement. Section 155 lets a court add attorney fees and capped extra amounts when an action or delay is vexatious and unreasonable.

The law's own words

Other dispute rules

“(1) In any action by or against a company wherein there is in issue the liability of a company on a policy or policies of insurance or the amount of the loss payable thereunder, or for an unreasonable delay in settling a claim, and it appears to the court that such action or delay is vexatious and unreasonable, the court may allow as part of the taxable costs in the action reasonable attorney fees”

215 ILCS 5/155, effective 1/1/2004

Other dispute rules

“F) Right of Recourse - If within 30 days after the receipt of the claim draft, the insured cannot purchase a comparable vehicle in excess of such market value, the company will reopen its claim file and the following procedure(s) shall apply:”

50 Ill. Adm. Code 919.80, effective 7/22/2002

How appraisal works

“iv) The company may conclude the loss settlement as provided for under the appraisal section of the insurance contract in force at the time of loss. This appraisal shall be considered as binding against both parties, but shall not preclude or waive any other rights either party has under the insurance contract or at common law.”

50 Ill. Adm. Code 919.80, effective 7/22/2002

Other dispute rules

“If the insured subsequently claims, based upon a written estimate which he obtains, that necessary repairs will exceed the written estimate prepared by or for the company, the company shall review and respond promptly to the insured and provide the insured with the name of a repair shop that will make the repairs in a workmanlike manner.”

50 Ill. Adm. Code 919.80, effective 7/22/2002

Other dispute rules

“Failure of the company to so inform the insured of the name of such a repair shop shall require the company to provide written notice to the insured that any and all reasonable costs incurred for repair or replacement related to the partial loss in excess of the company's estimate will be reimbursed by the company.”

50 Ill. Adm. Code 919.80, effective 7/22/2002

What it means in Illinois

Illinois has no labor rate or survey law; its cap rule covers paint and materials, not labor. On a private passenger auto claim, the insurer's estimate must be reasonable and enough for workmanlike repairs. If the insured's own estimate is higher, the insurer must respond promptly and name a shop that will do the work, or promise in writing to reimburse all reasonable costs above its estimate. Knowingly or repeatedly failing to try in good faith to settle fairly is an improper claims practice.

A 154.6 act is an improper claims practice only if committed knowingly or often enough to show a persistent tendency (154.5), and the Director enforces it through a statement of charges and a hearing (154.7). Rule 919.80 covers private passenger automobile claims, and its estimate and reimbursement duties run to the insured. Section 154.6(j), quoted below, reaches caps on paint or materials only; it does not mention labor.

The law's own words

Related claim rule

From a list that begins: “Any of the following acts by a company, if committed without just cause and in violation of Section 154.5, constitutes an improper claims practice:”

“Not attempting in good faith to effectuate prompt, fair and equitable settlement of claims submitted in which liability has become reasonably clear;”

215 ILCS 5/154.6, effective 7/1/2022

Related claim rule

From a list that begins: “Any of the following acts by a company, if committed without just cause and in violation of Section 154.5, constitutes an improper claims practice:”

“Attempting to settle a claim for less than the amount to which a reasonable person would believe the claimant was entitled, by reference to written or printed advertising material accompanying or made part of an application or establishing unreasonable caps or limits on paint or materials when estimating vehicle repairs;”

215 ILCS 5/154.6, effective 7/1/2022

What the insurer pays

“The estimate prepared by or for the company shall be reasonable, in accordance with applicable policy provisions, and of an amount which will allow for repairs to be made in a workmanlike manner.”

50 Ill. Adm. Code 919.80, effective 7/22/2002

What the insurer pays

“If the insured subsequently claims, based upon a written estimate which he obtains, that necessary repairs will exceed the written estimate prepared by or for the company, the company shall review and respond promptly to the insured and provide the insured with the name of a repair shop that will make the repairs in a workmanlike manner.”

50 Ill. Adm. Code 919.80, effective 7/22/2002

What the insurer pays

“Failure of the company to so inform the insured of the name of such a repair shop shall require the company to provide written notice to the insured that any and all reasonable costs incurred for repair or replacement related to the partial loss in excess of the company's estimate will be reimbursed by the company.”

50 Ill. Adm. Code 919.80, effective 7/22/2002

What it means in Illinois

Illinois makes it an improper claims practice for an insurer to try to settle for less than a reasonable person would think your customer is owed by setting unreasonable caps or limits on paint or materials when estimating vehicle repairs. It counts only without just cause and when done knowingly or often enough to show a persistent tendency. After a hearing, the Director of Insurance can order the insurer to stop, suspend its license up to 6 months, or fine it up to $250,000.

Penalties come from Section 154.8. The text doesn't define "unreasonable" caps or give your customer a right to sue; how it applies is a question for the Department of Insurance or a lawyer. Separately, 919.80 requires the insurer's own estimate, on the insured's partial-loss claim, to be reasonable and enough for workmanlike repairs.

The law's own words

Capping rule

From a list that begins: “Any of the following acts by a company, if committed without just cause and in violation of Section 154.5, constitutes an improper claims practice:”

“(j) Attempting to settle a claim for less than the amount to which a reasonable person would believe the claimant was entitled, by reference to written or printed advertising material accompanying or made part of an application or establishing unreasonable caps or limits on paint or materials when estimating vehicle repairs;”

215 ILCS 5/154.6, effective 7/1/2022

Related claim rule

“The estimate prepared by or for the company shall be reasonable, in accordance with applicable policy provisions, and of an amount which will allow for repairs to be made in a workmanlike manner.”

50 Ill. Adm. Code 919.80, effective 7/22/2002

Related claim rule

From a list that begins: “It is an improper claims practice for any domestic, foreign or alien company transacting business in this State to commit any of the acts contained in Section 154.6 if:”

“(a) it is committed knowingly in violation of this Act or any rules promulgated hereunder; or (b) It has been committed with such frequency to indicate a persistent tendency to engage in that type of conduct.”

215 ILCS 5/154.5

What it means in Illinois

Illinois insurers must answer claim communications within 15 working days and offer payment within 30 days of accepting liability on an undisputed amount. On private passenger auto claims, a median collision payment time over 40 days is unreasonable delay, and an insured's claim open past 40 days needs a written explanation (60 days for third-party property damage). For vexatious delay, a court can add attorney fees plus up to 60% of the recovery, $60,000, or the amount above the insurer's pre-suit offer.

The 40-day and 60-day figures measure the insurer's median payment period, from notice of loss to final payment or return of the repaired car, so they test the insurer's pattern rather than set a single-claim payment deadline. Days in Part 919 are calendar days unless stated as working days. Section 155 applies in lawsuits over a policy's coverage or loss amount, or over unreasonable delay in settling a claim.

The law's own words

If late

“or for an unreasonable delay in settling a claim, and it appears to the court that such action or delay is vexatious and unreasonable, the court may allow as part of the taxable costs in the action reasonable attorney fees, other costs, plus an amount not to exceed any one of the following amounts:”

215 ILCS 5/155, effective 1/1/2004

Respond

“"Reasonable Promptness", as used in Section 154.6(b) of the Code, means a maximum of 15 working days from receipt of communication from a claimant or insured.”

50 Ill. Adm. Code 919.40, effective 1/17/2025

Accept or deny

“shall be evidenced by a bonafide effort to communicate with all insureds and claimants when liability is reasonably clear within 21 working days after a notification of loss.”

50 Ill. Adm. Code 919.40, effective 1/17/2025

Pay

“The company shall affirm or deny liability on claims within a reasonable time and shall offer payment within 30 days after affirmation of liability, if the amount of the claim is determined and not in dispute.”

50 Ill. Adm. Code 919.50, effective 7/1/2004

Pay

“An unreasonable delay to pay automobile collision claims exists when the median payment period exceeds 40 calendar days. If a first party physical damage automobile claim remains unresolved for more than 40 calendar days from the date it is reported, the company shall provide a reasonable written explanation for the delay to the insured.”

50 Ill. Adm. Code 919.80, effective 7/22/2002