Total loss laws in Illinois

When is a car totaled in Illinois?

Short answer: Illinois sets no percentage threshold for insurer-paid claims (625 ILCS 5/3-117.1(b)), so the total-loss decision is generally the insurer's under your policy. The 70% figure in Illinois law does not apply when an insurer pays the claim.

There is no percentage for insurer-paid total losses: once an insurer pays a total-loss claim, the vehicle is considered salvage (with exceptions for hail-only damage that does not affect operational safety and for vehicles 9 or more model years old that the owner keeps by agreement). The 70% and 50% thresholds in the same section apply only to self-insurers, repossessions, fleet and flood vehicles.

Source: 625 ILCS 5/3-117.1(b)

Many online tables mix up title-branding rules with the insurer's own decision. Compare the total loss threshold in every state.

Does insurance pay sales tax on a total loss in Illinois?

Short answer: Yes, once you buy a replacement. Illinois insurers must pay back the sales tax and title fees if you buy a replacement within 30 days and send proof within 33 days (50 Ill. Adm. Code 919.80(c)(3)(A)). The insurer may also pay it up front with the settlement.

If a replacement vehicle is provided, the insurer must pay the sales tax and the transfer and title fees. On a cash settlement, if the insured buys or leases a vehicle within 30 days after receiving the settlement, the insurer must reimburse the sales tax and transfer and title fees actually incurred, capped at the amount payable on the value of the totaled vehicle. The insured must submit documentation within 33 days of receiving the settlement. The insurer may instead pay these amounts directly at settlement, and it must supply any reimbursement form with the notice or at settlement.

Source: 50 Ill. Adm. Code 919.80(c)(3)(A)

Tax on a replacement car in Illinois

6.25% state rate on dealer sales (Form ST-556), plus local taxes based on dealer location, such as RTA and home-rule taxes; Chicago residents owe an extra 1.25% home-rule use tax. Private sales use the separate RUT-50 tax.

Source: https://tax.illinois.gov/research/taxinformation/sales/vehicle-tax-faqs.html

See the sales tax and fee rule in every state.

How must the insurer value your car in Illinois?

Within 7 days of deciding the car is a total loss, the insurer must give the insured at least the Exhibit A total-loss information. It must then either replace the vehicle or pay cash. Replacement: same manufacturer and year, similar body style, options and price range, in as good or better condition, at a licensed dealer within a reasonable distance; the VIN and options go in the file; replacements of the current model year plus the 3 previous years must be bought through licensed dealers unless the insured waives this in writing. Cash: based on one of these: (A) a published source issued at least every 2 months covering at least the last 5 model years; (B) an electronic source producing statistically valid retail values for at least 85% of makes and models for 15 model years, using data from where the car was garaged and at least 1.5 million vehicles; (C) an electronic service using at least 2 currently available vehicles from licensed Illinois dealers, or 2 sold by licensed Illinois dealers (one within the past 30 days and one within the past 90 days), with the dealers within 50 miles of the metro area where the data is gathered and dealer names, locations and VINs kept in the file; or (D) if the vehicle is not quoted in the source, at least two written dealer quotations, whose dealer names, locations and copies must be given to the insured. The file must document how market value was set. 'Get ready to go' and dealer-prep deductions are prohibited. Betterment deductions must reflect a measurable decrease in market value and be itemized; deductions for prior wear and tear, missing parts and rust may not exceed $500 (919.80(d)(4)(A)(ii)). The insurer may not require unreasonable travel or require the insured to locate the replacement. Partial losses: the insurer must give the insured its estimate on request, and if the insured's own written estimate is higher, the insurer must name a shop that will do the work in a workmanlike manner or agree in writing to reimburse reasonable excess costs (919.80(d)(6)). Third-party claims: where liability is reasonably clear, the at-fault driver's insurer must pay reasonable rental costs for loss of use in proportion to its liability (919.80(d)(2)).

Source: 50 Ill. Adm. Code 919.80(c), (d)(2), (d)(4), (d)(6) (s. 919.80 as amended at 26 Ill. Reg. 11915, eff. July 22, 2002)

To check the numbers in your own report, read the CCC valuation report, line by line and how projected sold and typical negotiation deductions work.

How long does the insurer have to pay a total loss in Illinois?

Short answer: Under Illinois rules, payment is due within 30 days after liability is affirmed (50 Ill. Adm. Code 919.40, 919.50(a), 919.80(b)-(c)).

Respond to communications from a claimant or insured within 15 working days ('reasonable promptness'). Make a bona fide effort to communicate within 21 working days after notice of loss when liability is reasonably clear ('prompt investigation') (919.40, as amended eff. Jan. 17, 2025). Affirm or deny liability within a reasonable time, and offer payment within 30 days after affirming liability for undisputed amounts. For a first-party denial or an offer lower than the amount claimed, give a written explanation, with the Notice of Availability of the Department of Insurance, within 30 days after the investigation is completed; for a third-party denial, give a written explanation within 30 days after the initial liability determination (919.50(a)). A first-party auto physical damage claim unresolved for more than 40 calendar days requires a written explanation of the delay, and a third-party property damage claim requires one after 60 days, each with the Notice of Availability (919.80(b)).

Source: 50 Ill. Adm. Code 919.40, 919.50(a), 919.80(b)-(c)

Compare claim deadlines in every state.

Can you negotiate a total loss offer in Illinois?

Short answer: Yes. You can reject the offer in writing, ask for the full valuation report and the reason for each deduction, and send your own evidence. Illinois also lets you ask the insurer to reopen the claim within 30 days after receiving the claim draft if you cannot buy a comparable car for the amount paid (50 Ill. Adm. Code 919.80(c)(2)). The Illinois Department of Insurance takes complaints about claim handling.

Yes. If within 30 days after receiving the claim draft the insured cannot buy a comparable vehicle for the insurer's market value, the insurer must reopen the file. It must then locate a comparable vehicle, pay the difference, offer a replacement, or settle through the policy's appraisal clause, which binds both sides but preserves other rights (919.80(c)(2)(F)). This reopening duty does not apply if the insurer's settlement papers already named a specific available comparable vehicle, with its VIN, that could have been bought for the insurer's value (919.80(c)(2)(F)(v)). The insured can ask for the dealer quotes and valuation documentation, file a complaint with the Illinois Department of Insurance (the insurer must include the Notice of Availability in its explanation letters), or sue in small claims court.

1. Ask the adjuster in writing for the complete valuation report and the list of comparable vehicles.
2. Check it line by line: negotiation deductions, condition ratings, comparables, tax and fees. How to read the report.
3. Send a written rebuttal with your evidence and a specific number. How to dispute a total loss valuation.
4. If you still disagree on a claim under your own policy, consider the appraisal clause.
5. If the insurer does not follow the rules above, file a complaint with the state.

How long do you have to sue over a totaled car in Illinois?

Short answer: Generally 5 years to sue for damage to your car (735 ILCS 5/13-205). Your policy may set a shorter limit for suing your own insurer.

Property damage claims in Illinois generally must be filed within 5 years. Your policy may set a shorter deadline for suing your own insurer; check its "legal action against us" clause.

Source: 735 ILCS 5/13-205 (actions to recover damages for an injury done to property, real or personal: 5 years)

How to file an insurance complaint in Illinois

Short answer: File a free complaint with the Illinois Department of Insurance online. It asks the insurer for a written response, but it cannot set the amount you are owed.