CHICAGO (WLS) — It’s mandatory in Illinois for drivers to have insurance. Non-standard insurance is for those considered high risk or with a poor credit history.
But some people who were hit by drivers with non-standard insurance say they are getting lowballed on claims.
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Debra Smith’s car sits in her southwest suburban Plainfield driveway.
“It kind of shakes in. It sounds like something’s about to crack,” Smith said.
Smith has been in a dispute with American Alliance Casualty, a non-standard auto insurer from Chicago. The process was slow, and she received a much lower settlement than expected.
“They’re saying $1,000. That won’t be – that’s not even the amount of money to get to replace the stuff,” Smith said.
An estimate from her body shop said repairs could be $5,320.
And American Alliance Casualty is saying that it will only cover $805 dollars of its own $1,000 estimate because its only accepting 75% of liability.
Despite the other driver being at fault according to the police report, the insurance company claims their investigation, which considered statements from all parties involved and the impact points, found that Ms. Smith bore some responsibility. However, they are willing to reevaluate if more evidence is provided.
“There’s nothing in their police report that refers to me as doing anything speeding or not paying attention that could have prevented,” Smith said.
Injury and accident lawyer Neal Gainsberg agrees. He says insurers assigning percentages of blame is legal in Illinois, but he sees it more with non-standards.
“The at-fault driver is 100% at fault. I don’t see where this nonstandard company is blaming any responsibility on the victim here. Their driver must be saying something,” Gainsberg said. “That’s why it’s important, if you do get into an accident, to see if you can get a witness or video.”
As for Smith’s higher estimate on repairs, American Alliance Casualty says her repair shop selected parts at a higher cost. Through American Alliance Casualty, they said, she would get “aftermarket parts that meet industry standards.” American Alliance Casualty says it would also be at one of its repair facilities it partners with, which offer lifetime warranties. American Alliance Casualty says it followed all state laws in the claim.
Smith says she reluctantly accepted the $805 offer.
The Chicago-area Better Business Bureau has issued an alert on American Alliance Casualty for 666 complaints in the last three years.
“The consumers allege that they’re not knowledgeable about the repair or how long it’s going to take or the claim procedures. So, they feel they’re getting the runaround,” said Better Business Bureau President Steve Bernas.
American Alliance Casualty says its records “consistently demonstrate active follow-ups and responsive engagement throughout the claims process” and that it has “robust procedures in place to ensure timely and transparent responses to all claims.” The company says people like Smith complain because “consumers have an incomplete understanding of the claims process or are ultimately dissatisfied with the outcome.”
Through the Freedom of Information Act, the I-Team found that the Illinois Department of Insurance received 1,326 complaints from 2022 through 2024 on American Alliance Casualty, making it second for complaints among all auto insurers in the state, which includes standard and non-standard insurers.
American Alliance Casualty says that 99% of cases filed with the state against them ultimately get closed “in favor of Alliance’s position, confirming that our claim handling complied with applicable laws and policy provisions.” The company added that the non-standard industry has “lower customer cooperation rates” and that “a significant portion” of their complaints are not their own customers but are third parties like Smith.
The insurer added that it is committed to resolving claims fairly, transparently, and in compliance with all regulations.
Under the Freedom of Information Act, the I-Team obtained data from the Illinois Department of Insurance. We found that overall, non-standard auto insurers have the highest complaint ratios when compared to standard auto insurers.
The BBB says despite complaints, most non-standard companies are abiding by state laws.
“And there’s a lot of loopholes. Unfortunately, Illinois law does allow for certain things that happen or that they’re required to do, and they seem to do it to the exact tune. And they don’t go beyond that,” Bernas said.
That is just part of the damage Portage Park neighborhood resident Kelly Moore says she is trying to get fixed.
She was rear-ended by a driver with the nonstandard insurer Direct Auto Insurance Company, which has had 655 complaints filed with the state from 2022 through 2024.
“The phone times were long, and the customer service was unhelpful,” Moore said.
Moore’s body shop estimate was about $1,000, but Direct Auto Insurance Company offered her significantly less.
“They were willing to pay me $268. They were only willing to let me go to an auto body shop they had selected. That auto body shop had an “F” rating with the Better Business Bureau,” Moore said. “I thought it was a joke.”
Moore ended up declining the coverage and filed with her own insurance company. ABC7 reached out to Direct Auto Insurance Company multiple times and have not yet heard back.
The Illinois Department of Insurance which assists consumers with complaints, declined ABC7’s request for an on-camera interview about concerns in the industry.
You can reach out to your state legislator if you want change. If you are in a similar situation, you can file with your own insurance like Moore did. You may have to pay a deductible, but your insurance can seek reimbursement from the other insurer.
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