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New law in Illinois requires transparency in total vehicle decisions

In a significant step toward transparency, Illinois Gov JB Pritzker has signed House Bill 5559 into law, which requires auto insurance companies to provide detailed explanations of how they determine a vehicle is a total loss.
The new law, championed by State Rep. Tracy Katz MuhlD-Buffalo Grove and State Sen. Julie Morrison, D-Lake Forest, aims to shed light on the calculation process used by insurers when they assess a car as a total loss. This decision affects about 75,000 vehicles annually in Illinois, according to a recent study by the Illinois Department of Transportation.
“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.
The legislation requires insurers to provide insured motorists with a detailed breakdown of the factors involved in their decision-making process, including any available repair estimates, the estimated salvage value of the vehicle, assessed market value and other relevant costs and calculations.
Opponents of the bill had expressed concerns about the potential burdens on auto insurance companies and the possibility of increased costs for customers. However, the bill passed unanimously in both legislative chambers, indicating broad support for the measure.
“For the approximately 75,000 families, it’s a financial disaster compounded by the opacity of the process of understanding how that calculation was made,” Katz Muhl added.
Late. Emphasizing the importance of the measure, Morrison stated, “In determining a total loss of an insured vehicle, the insurance company must provide the insured with a brief description of how the determination was made.”
Although the Illinois Insurance Association initially opposed the measure, Katz Muhl expressed pride in reaching consensus among various stakeholders, including consumer advocates, the garage community and insurance representatives.
“We are pleased to have worked with all the consumer advocates, the body shop and insurance stakeholders,” said Katz Muhl.
As of now, it remains unclear whether the Illinois Insurance Association has formally withdrawn its opposition to the bill. Centertorget could not immediately confirm this with the association.
The new law is an important step forward in ensuring that consumers are better informed about the insurance processes that affect them, promoting fairness and transparency in the aftermath of car accidents.

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