How the Illinois 6% Prejudgment Interest Act Maximizes Your Chicago Personal Injury Settlement

If you were injured in a personal injury accident, you may be facing mounting medical bills and lost wages. On top of that, it may seem as though the at-fault party’s insurance company is in no hurry to resolve your claim. You are not imagining that apparently intentional delay. Insurance companies often intentionally stretch out negotiations, hoping the financial pressure it causes will push an injured party to accept less than what their case is worth. The Illinois Prejudgment Interest Act was passed in an attempt to discourage that practice by effectively penalizing insurance companies for delaying settlement. The Act gives injured victims a powerful tool that incentivizes early, fair settlements if insurance companies want to avoid paying prejudgment interest. Contact the team at Paul Padda Law today by calling 866-526-7974 for a free claim valuation and strategy session.

The Frustration of Insurance Delays: Why This Law Exists

When a personal injury claim is not resolved promptly, it can cause emotional and financial stress. Insurance companies are not only aware of this, but they use it strategically to pressure injured victims to accept a less-than-fair settlement.  Recognizing that injured individuals should not be financially punished while waiting for a fair outcome, lawmakers enacted the Illinois Prejudgment Interest Act to counter the delay tactics commonly used by insurance companies. By allowing your claim to accrue interest before settlement, the law shifts the cost of delay back onto the insurance company and provides an incentive for insurance companies to engage in meaningful and timely settlement negotiations.

What is the Illinois 6% Prejudgment Interest Act?

Designed to discourage insurance companies from delaying the resolution of valid personal injury claims, the Illinois Prejudgment Interest Act effectively adds a financial consequence for stalling.

Forcing Insurance Companies to Pay for Stalling

The Act applies to personal injury or wrongful death actions and imposes a six percent interest on prejudgment damages that usually accrue from the date the lawsuit was filed. In practical terms, insurance companies now face increased financial exposure the longer they avoid a settlement instead of benefitting from the delay.

The Damages Included (and Excluded) Under the Law

The law applies to specific categories of compensatory damages, including economic damages, such as medical bills and lost wages, as well as non-economic damages, including pain and suffering. Prejudgment interest does not apply to punitive damages, sanctions, statutory attorneys’ fees, or statutory costs.

Stop letting the insurance company hold your recovery hostage. Let’s hold them accountable together.

How the 6% Interest is Calculated on Your Chicago Injury Case

Understanding how the six percent interest rule operates in your Chicago personal injury case is crucial to ensuring that you receive a full and fair settlement.

When Does the “Interest Clock” Actually Start?

Under the Act, interest begins to accrue when a lawsuit is filed, meaning the formal court process triggers the accrual period rather than the underlying injury date. Interest is typically calculated based on the dollar amount of qualifying damages that are ultimately awarded or agreed upon, with interest accruing until the case is resolved.

The 12-Month “Settlement Offer” Loophole

Defendants can avoid paying interest if they make a settlement offer within 12 months of the date a lawsuit is filed, and that offer ends up being equal to or greater than the final judgment. For example, if a lawsuit is filed in January and a settlement offer is extended for $50,000 in December, the defendant can avoid paying interest if you eventually settle the lawsuit for $50,000 or less.

Not sure if the insurance company’s offer cuts off your interest? Contact us for a confidential review.

Does the Law Apply to All Illinois Personal Injury Cases?

The Illinois Prejudgment Interest Act does not apply universally to every personal injury claim, but it does cover most of the common as well as high-stakes personal injury cases filed in Illinois.

Car Accidents, Medical Malpractice, and Wrongful Death

While each case is unique, the Act is designed to cover a broad range of personal injury cases in Illinois. The imposition of prejudgment interest can be a particularly powerful tool in catastrophic car accident cases, medical malpractice, and wrongful death cases that are complex by nature and frequently take longer to resolve.

Why You Need a Trial-Tested Lawyer to Protect Your Interest

Although the Illinois Prejudgment Interest Act can significantly increase the value of a personal injury claim, you need an experienced personal injury attorney to ensure that you benefit from its application. Not surprisingly, insurance companies routinely try to argue that the provisions of the Act do not apply or that a settlement offer eliminates the need to pay interest. A trial-tested lawyer understands how to preserve your eligibility for prejudgment interest as well as how to defend against arguments designed to reduce or eliminate interest owed to you under the Act.

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