An Illinois bill is headed for Gov. J.B. Pritzker’s signature that will require insurance companies to tell vehicle owners how their vehicles were determined total losses.

While some states determine total loss under a threshold or use a formula to make the determination, the Illinois Department of Insurance simply says it means “when the cost to repair a vehicle approaches or exceeds the vehicle’s actual cash value.”

Total loss threshold – the percentage at which vehicles are deemed totaled by law – varies by state and not all states have a threshold. And total loss isn’t always based on whether the cost to repair the vehicle exceeds its actual cash value. Sometimes it’s a total loss formula that is used quite often by the insurance industry, where the cost to repair and the actual salvage value that can be recouped exceeds the value at the time of loss.

HB 5559 would amend current law to state: “Upon the determination of a total loss of an insured vehicle, the insurance company shall provide the insured with a brief description of how that determination was made, including any available repair estimate, estimated vehicle salvage value, assessed market value, and other costs and calculations used.”

If signed into law, the provisions would apply to policies issued or renewed on or after July 1, 2025.

Sponsor of the bill, Rep. Tracy Katz Muhl, stated in an April news release that she’s using her first legislative session to advance critical measures, including increasing transparency for insurance policyholders.

“Our community, and all Illinoisians, deserve innovative, data-driven solutions to their most pressing concern,” Katz Muhl said. “That’s why I’ve put forth a legislative agenda that’s focused squarely on the issues I’ve heard from my constituents are most important to them.”

The bill passed 99-0 in the House April 19, and unanimously in the Senate May 16.

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