Why the first number is rarely the real number
Insurance adjusters routinely open negotiations with a conservative figure, expecting a counteroffer. Accepting that first offer typically closes the claim permanently — there's generally no going back to ask for more later, even if additional injuries or costs surface afterward.
No common-law bad faith tort, just a statute
Illinois takes a genuinely different path here than many states. It has no traditional common-law bad faith tort at all. Instead, 215 ILCS 5/155 provides a purely statutory extracontractual remedy, available when an insurer's action or delay in an insurance dispute is found to be "vexatious and unreasonable."
A specific, capped formula
Where the standard is met, a court may award reasonable attorney's fees and other costs, plus an additional amount — capped at the lowest of three figures: 60% of what the court or jury finds the party entitled to recover, $60,000, or the excess of the recovery over whatever the company offered to pay before the lawsuit was filed. That third prong is a genuinely practical detail: it directly rewards a policyholder for having pushed the case past a lowball pre-suit offer.
A real standard, not automatic for any denial
Courts determine whether conduct is "vexatious and unreasonable" by looking at the totality of the circumstances, including the insurer's attitude throughout the claim. An ordinary, good-faith dispute over value generally isn't enough on its own — the remedy is aimed at genuine misconduct in how a claim was handled, not merely an insurer offering less than the policyholder wanted.
What this means practically
Because the third prong of the formula directly compares the final recovery against the pre-suit offer, documenting exactly what was offered and when is genuinely useful in Illinois, beyond simply building your own damages estimate. Comparing the insurer's offer against your own complete, well-documented tally of damages before responding is the practical step this framework rewards.