Illinois drivers can soon challenge low auto insurance payouts without court. Learn how Public Act 104-0767 creates a mandatory appraisal process.
Illinois drivers facing lowball auto insurance payouts will soon have a faster way to settle disputes without hiring a lawyer.
Under Public Act 104-0767 (House Bill 4160), auto insurance policies in Illinois must include a mandatory Right to Appraisal provision starting July 1, 2027. Signed into law by Gov. JB Pritzker, the measure creates a structured, out-of-court process to resolve valuation disagreements between policyholders and insurance companies.
What Changing Insurance Policies Mean for Drivers
The new legislation adds Section 398 to the Illinois Insurance Code. It targets first-party physical damage coverage—specifically comprehensive and collision policies—where an insurer’s loss estimate fails to cover a auto repair shop’s documented estimate or total loss valuation.
Instead of accepting a low payout or spending thousands on court fees, policyholders can demand a binding independent review.
How the Illinois Auto Appraisal Process Works
When a dispute over repair costs or vehicle value arises, the law sets a strict timeline:
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Demand for Appraisal: Either the driver or the insurer can submit a written request to initiate the appraisal process. Insurers cannot refuse the demand.
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Selecting Appraisers: Within 7 business days, both sides must choose a competent, independent appraiser at their own expense.
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Review & Umpire Selection: The two appraisers have 5 business days to agree on the loss value. If they disagree, they select a neutral umpire.
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Binding Decision: A valuation agreed upon by any two of the three parties becomes legally binding.
Benefits for Vehicle Owners and Repair Shops
For motorists, the law removes a major bottleneck in physical damage claims. When an insurer insists on lower labor rates or cheaper parts, policyholders often face out-of-pocket expenses or repair delays.
Auto body shops also gain a standardized framework to defend their repair estimates, ensuring damaged vehicles get back on the road safely without prolonged negotiation deadlocks.
When Does the Right to Appraisal Take Effect?
The law officially applies to policies issued, delivered, or renewed on or after July 1, 2027. The delayed implementation gives insurance providers time to update policy language and establishes clear ground rules for future claim disputes.
