Policy Limit Demand in Illinois Injury Cases

Last Updated: October 20, 2026

By Robert Parker, Attorney, Parker & Parker.

Illinois minimum bodily-injury liability: $25,000 per person under 625 ILCS 5/7-317. Applicable policy limits and settlement duties require separate review.

A settlement demand within policy limits gives the insurer an opportunity to protect its insured from an excess judgment. The good-faith settlement duty depends on the claim and the reasonable probabilities of liability and an excess recovery. The claimant’s deadline alone does not establish bad faith.

Some of the biggest strategic decisions in a personal injury case happen in the letter from the claimant’s attorney to the insurer. A settlement demand presents the claim and gives the insurer an opportunity to respond. Whether a refusal supports a bad-faith claim requires a separate examination of the facts.

This piece explains settlement demands within policy limits, the claim information that matters, and why the insurer’s response requires a case-specific review.

What is a policy-limits demand and when does it matter?

A settlement demand within policy limits proposes terms for resolving the claim against the insured for an amount that does not exceed those limits. It may seek the full limits or a lower amount. The insurer’s good-faith handling of that opportunity depends on the claim and the circumstances.

A request for coverage information and an offer to settle are separate steps. Your lawyer can review the coverage information before deciding whether to seek settlement within the available limits. In a state with a $25,000 liability minimum, which is where Illinois stands under 625 ILCS 5/7-317, that coverage review matters.

Hypothetical illustration: The classic candidate for a policy limit demand looks like this: the at-fault driver carries $25,000 in liability coverage. The plaintiff’s medical bills already exceed $50,000, often after treatment at OSF Saint Francis or Carle Health Methodist Hospital in Peoria, with more care expected. Liability is essentially undisputed (a rear-end crash, a left-turn-on-red, a documented red-light run). The defendant has no significant attachable assets. The case value, fairly assessed, is well into six figures.

A small liability policy makes the coverage review important. Any additional recovery depends on the available policies, potential defendants, and applicable law. Our piece on how Illinois’s $25,000 minimum changes everything covers the broader coverage landscape.

What Information Helps the Insurer Evaluate a Demand

A settlement demand should identify the claim, the proposed settlement terms, and the information supporting liability and damages. The sufficiency of a particular demand requires review in its context.

Identifying information. Include the insured’s name, claim and file numbers, policy number if known, loss date, location and time, claimant’s name, and attorney’s file number and contact information so the insurer can identify the claim and respond.

The offer and requested response date. State the settlement amount and terms clearly. If you request a response by a particular date, make that request clear and explain the circumstances behind it.

The circumstances matter. A deadline in the demand does not, by itself, establish bad faith if the insurer has not accepted by that date; the circumstances of the demand and response matter.

Addressing the demand. Use the insurer’s claim-contact information and retain proof of where and when the demand was sent. Whether the insurer had an opportunity to evaluate and accept the offer depends on the circumstances.

Supporting documentation. The strongest policy limit demands are accompanied by the proof the insurer needs to evaluate the case: medical records showing the diagnosis and treatment, billing records showing the special damages, wage loss documentation, and any liability evidence (police report, photographs, witness statements). A bare demand without proof is easy for an adjuster to dismiss. A demand backed by a complete file is much harder to refuse without a good-faith review.

What good-faith duty does an Illinois liability insurer owe?

A policy-limits settlement demand gives the insurer an opportunity to protect its insured from a possible judgment above the coverage limits. Under Illinois law, the good-faith settlement duty can arise when a claim has been made, liability and an excess recovery are reasonably probable, and the claimant offers to settle within the policy limits. A deadline in the demand does not, by itself, establish bad faith if the insurer has not accepted by that date; the circumstances of the demand and response matter.

See Haddick v. Valor Insurance, 198 Ill. 2d 409 (2001). The duty protects the insured’s settlement interests, and it can arise before a lawsuit is filed.

How should your lawyer review the insurer’s response?

Illinois evaluates the insurer’s good-faith handling of an opportunity to settle within the limits in light of the claim, the likelihood of liability and an excess judgment, and the circumstances of the demand and response.

Keep copies of the demand, the records provided to the insurer, and its responses. The insurer’s knowledge and the circumstances of the opportunity to settle matter.

What if the insurer refuses the demand?

A deadline in the demand does not, by itself, establish bad faith if the insurer has not accepted by that date; the circumstances of the demand and response matter. Whether the insurer breached its good-faith settlement duty requires a case-specific review.

What should you review before choosing the next step?

Your lawyer should review the demand, the insurer’s response, the claim evidence, and the policy before advising you about the next steps.

When should you consider a policy-limits demand?

Not every case is a candidate for a policy limit demand. The strategy works best when several conditions line up.

High damages, low policy limits. Serious documented injuries, surgery, supported permanent impairment, and significant wage loss can make a settlement demand within the available limits an important part of the claim review. Liability and the probability of a recovery above the limits still matter.

Clear liability. A defendant who ran a red light, rear-ended a stopped car, or was cited for the violation creates a much stronger “reasonable probability of a finding of liability” picture than a contested intersection collision with disputed fault. The clearer the liability, the more obvious the carrier’s duty becomes.

The defendant’s assets and other coverage. If the at-fault driver lacks attachable assets, settlement evaluation includes the liability policy and any other potentially available coverage, such as UIM. Payment under another policy depends on its terms, the claim, and the procedures that apply. Your lawyer should examine those questions before you accept an offer or sign a release.

Documented damages. Gather the medical records, bills incurred so far, work-loss proof, and available liability evidence. The medical picture can develop over time. Your lawyer should consider the available information and any applicable filing deadline when advising when to send a demand.

The decision to send a policy limit demand is one of the biggest strategic calls in a personal injury case. Our broader discussion of how Illinois car accident cases get valued covers the damages side; the demand side is where that valuation gets weaponized.

What This Looks Like in Practice

We document the demand, the supporting claim information, and the insurer’s response. The time taken to respond is part of the circumstances to review.

If an insurer disputes or refuses the demand, preserve the correspondence and the evidence it received. Those records help your lawyer evaluate the response in context.

The discussion of how carriers like State Farm value claims when the plaintiff has no lawyer addresses claim valuation from another angle. A policy-limits demand gives the insurer an opportunity to consider settlement in light of the documented claim.

Should you make a settlement demand within policy limits?

A settlement demand presents an opportunity to resolve the claim within the coverage limits. Evaluate the claim evidence, the proposed terms, and the insurer’s response together before deciding what to do next.

If you have been told the at-fault driver “only has minimum coverage” and you have been advised to take whatever the insurer offers, ask whether a formal policy limit demand has been made, and what response the carrier gave. The answer to those two questions tells you a great deal about whether the case is being handled with your interests, or the carrier’s interests, in mind.

How can we help with a serious injury and limited insurance?

Parker & Parker offers free, no-obligation consultations.
Call 309-673-0069 or
schedule online
to discuss your case today.

What does an Illinois certified policy-limits request require?

For a personal private-passenger automobile policy, 215 ILCS 5/143.24b allows a claimant, or an attorney purporting to represent the claimant, to request the insured’s liability coverage limits by certified letter. The letter must include a brief description of the injuries, medical bills incurred to date, and copies of medical records. The insurer must provide the limits confidentially within 30 days after receiving the letter, by certified mail, return receipt requested.

Your lawyer can request liability coverage information the right way under Illinois practice. Do not rely on a casual phone promise from an adjuster.

Illustration only, not your case: A serious fracture case with surgery can burn through a minimum liability layer faster than a soft-tissue claim that resolves in weeks. Knowing that early changes whether UIM, MedPay, health-insurance liens, and additional defendants get attention before someone asks you to “just take the limits and move on.”

Medical-payment benefits need a separate policy review; see our Illinois MedPay guide. If you are organizing the first call for an injured relative, read calling a lawyer for a family member.

We do not publish average settlements. We do show you the coverage map for your file.

Frequently Asked Questions

What is a policy limit demand in a personal injury case?

A policy-limits settlement demand gives the insurer an opportunity to protect its insured from a possible judgment above the coverage limits. The good-faith settlement duty can arise when liability and an excess recovery are reasonably probable and the claimant offers to settle within the limits.

Does the insurer have to accept my policy-limits demand by the date I choose?

Not automatically. Illinois evaluates the insurer’s good-faith handling of an opportunity to settle within the limits in light of the claim, the likelihood of liability and an excess judgment, and the circumstances of the demand and response.

What happens if the insurance company refuses to pay the policy limit?

A deadline in the demand does not, by itself, establish bad faith if the insurer has not accepted by that date; the circumstances of the demand and response matter. Your lawyer should examine the response and claim evidence before advising you about possible remedies.

Can I make a policy limit demand without filing a lawsuit?

Yes. The good-faith settlement duty can arise before a lawsuit is filed. Your lawyer should consider the claim evidence, the proposed settlement terms, and any applicable filing deadline when advising about the demand.

What’s the difference between a policy limit demand and a regular settlement demand?

A settlement demand may seek an amount within the policy limits, including the full limits. The good-faith settlement duty depends on the claim and the reasonable probabilities of liability and an excess recovery, as well as the opportunity to settle within the limits.

Will I get more money with a policy limit demand than I would otherwise?

A demand does not guarantee a larger recovery. The settlement terms, the injuries and liability evidence, the available coverage, and the insurer’s response require review in the particular case.

If you have been seriously injured by a driver with limited insurance coverage, Parker & Parker can evaluate whether a policy limit demand fits your case and walk you through the strategic decision before any letter goes out.

Can I demand limits in writing myself?

Your lawyer handles coverage inquiries the right way for Illinois practice. Call 309-673-0069 if an adjuster is pushing a quick check.

What if the other driver had no insurance?

That is an uninsured motorist analysis on your own coverage layers, not a reason to give up.

What if their insurance is “only the minimum”?

Minimum limits are a starting fact, not the end of the claim review. UIM and other defendants may matter.

Does a limits offer mean I should settle today?

Not if you do not yet understand the medical picture. Early limits offers can still be incomplete money.

Worried about low limits after a Peoria-area crash? Call or text 309-673-0069, or schedule a free consultation. Parker & Parker: Peoria, Illinois. On injury cases we accept: no fee and no costs unless we win (how our fees work).

What Happens After a Policy Limit Demand in an Illinois Personal Injury Case?