Illinois Roofing Insurance Claim Laws: What Contractors Must Know

Illinois is one of the most regulated roofing markets in the country. Between the Illinois Roofing Industry Licensing Act at 225 ILCS 335, the Illinois Insurance Code at 215 ILCS, and a stack of public acts targeting contractor-homeowner dealings on insurance claims, the state has left very little to guesswork. That is a good thing for contractors who run their business the right way and a hard thing for contractors who do not.

This 2026 guide walks Illinois roofing contractors through the statutes and rules that actually shape how a claim gets sold, written, supplemented, and paid. Licensing under 225 ILCS 335. Disclosure duties under Public Act 96-1000. The improper claim practice standard at 215 ILCS 5/154.6. The deductible statute. The appraisal process. And the statutory bad faith remedy at 215 ILCS 5/155 that gives Illinois insureds a real weapon when a carrier stonewalls.

Nothing here is legal advice. This is operator-level knowledge so you can have more informed conversations with your counsel, your homeowners, and the adjusters you negotiate with every day.

Illinois Roofing Industry Licensing Act (225 ILCS 335)

Unlike Ohio, Illinois issues a statewide roofing contractor license. The Illinois Roofing Industry Licensing Act, codified at 225 ILCS 335, requires any person engaging in the business of roofing or installing or repairing a roof for compensation to hold a state license issued by the Illinois Department of Financial and Professional Regulation (IDFPR). This is not optional, and the penalties for unlicensed work are real.

Who Must Be Licensed

The Act applies to any individual or entity that contracts to install, alter, repair, or maintain a roofing system in Illinois. There are two license types.

• Limited roofing contractor license: Permits work on residential structures of up to eight units.
• Unlimited roofing contractor license: Permits work on any roofing project, residential or commercial.

The license belongs to the qualifying party for the business. The business itself registers with the IDFPR and operates under that qualifying party's credential. If the qualifying party leaves, the business has a limited window to replace them before the registration lapses.

Prerequisites for Licensure

• Pass the Illinois roofing contractor licensing exam administered by the IDFPR
• Provide proof of general liability insurance with minimum limits prescribed by the Act
• Provide proof of workers compensation coverage if the contractor has employees
• Post a surety bond as required by the Act and its rules
• Pay the application and license fees

Penalties for Unlicensed Roofing Work

Operating without an Illinois roofing license exposes the contractor to administrative penalties from the IDFPR and, in many cases, makes the roofing contract unenforceable against the homeowner. Illinois courts have declined to enforce contracts for work that required licensure when the contractor did not hold a valid license at the time the contract was signed. Translation. You can do the work, eat the cost of materials, and walk away empty-handed if a homeowner decides to fight.

Before you sign any Illinois roofing contract, verify your license is active on the IDFPR license lookup portal and that it covers the structure type you are working on.

Public Act 96-1000 Contractor Disclosure Requirements

Illinois Public Act 96-1000, effective in 2010, added specific disclosure duties to the Roofing Industry Licensing Act when a contractor's payment is to be paid from the proceeds of a property and casualty insurance claim. These disclosure rules are some of the most aggressive in the country and they apply to essentially every storm-season roofing sale.

What the Statute Requires

When a roofing contractor negotiates, offers, or provides goods or services that will be paid from insurance proceeds, the contract must include specific language required by 225 ILCS 335. Key elements include the following.

• Written contract: The agreement must be in writing.
• Conspicuous cancellation notice: The homeowner has the right to cancel within a defined period after being notified by the insurer that all or part of the claim is not a covered loss.
• Refund of deposits: If the homeowner timely cancels under this provision, the contractor must return any payments or deposits within a statutory timeframe, less the cost of goods and services actually furnished.
• Prohibition on acting as a public adjuster: The contractor cannot represent or negotiate on behalf of the insured in any way that would constitute public adjusting without the appropriate license.
• Prohibition on deductible rebates: The contractor cannot pay, waive, rebate, or promise to pay, waive, or rebate the insured's deductible.

Under Public Act 96-1000, a residential roofing contractor shall not advertise or promise to pay, waive, or rebate all or part of any insurance deductible as an inducement to the sale of goods or services. Violations expose the contractor to license discipline and potential criminal liability under the Illinois insurance fraud statutes.

Why This Matters for Sales Teams

Every marketing flyer, door-knocker script, and landing page in Illinois needs to be screened against Public Act 96-1000. Phrases like "no deductible," "we pay your deductible," or "zero out of pocket" are direct violations and create both license and criminal exposure. Your sales training needs to address this at onboarding, not during a compliance audit.

215 ILCS 5/154.6 Improper Claim Practices

Illinois's version of the unfair claim practices statute is at 215 ILCS 5/154.6. It lists conduct that constitutes improper claims practices when committed by an insurer with a frequency that indicates a general business practice.

What 5/154.6 Prohibits

• Misrepresenting relevant facts or policy provisions
• Failing to acknowledge communications about claims with reasonable promptness
• Failing to adopt and implement reasonable standards for the prompt investigation and settlement of claims
• Not attempting in good faith to effectuate prompt, fair, and equitable settlement of claims where liability is reasonably clear
• Compelling policyholders to institute suit to recover amounts due under the policy by offering substantially less than the amounts ultimately recovered
• Failing to affirm or deny coverage within a reasonable time after proof of loss is submitted

Enforcement and Evidence

Like Ohio's ORC 3901.21, 215 ILCS 5/154.6 does not create a private right of action on its own. Enforcement runs through the Illinois Department of Insurance. However, the conduct described in 5/154.6 overlaps heavily with what plaintiffs prove under 215 ILCS 5/155, Illinois's statutory bad faith remedy. Courts regularly allow plaintiffs to reference 5/154.6 conduct when arguing that an insurer's handling of a claim was vexatious and unreasonable under 5/155.

For contractors, the practical point is that 5/154.6 violations become evidence. Your documentation of adjuster delays, misrepresentations, and lowball offers is not just a record for the homeowner. It is the paper trail that makes a 5/155 claim viable if the dispute ever gets that far.

Illinois Deductible Statute and Fraud Exposure

Illinois takes deductible integrity more seriously than most states. Between the explicit prohibition in the Roofing Industry Licensing Act and the general criminal insurance fraud statutes in 720 ILCS 5/17-10.5, a contractor who waives, pays, or rebates a homeowner's deductible is taking on substantial exposure.

The Roofing Act Prohibition

225 ILCS 335 explicitly forbids a residential roofing contractor from advertising, promising, or paying, waiving, or rebating an insurance deductible as an inducement to the sale of goods or services. Violation can result in license discipline including suspension or revocation.

Criminal Insurance Fraud

Beyond the licensing consequences, deductible schemes in Illinois typically involve misrepresenting the amount the homeowner actually paid to the contractor. That misrepresentation to the insurer is insurance fraud under 720 ILCS 5/17-10.5, classified by amount from a Class A misdemeanor up to a Class 1 felony.

Legitimate Practices vs. Prohibited Ones

The boring path is the safe path. Collect the deductible. Document it. Move on.

The Appraisal Clause in Illinois Claims

Standard Illinois homeowner policies include an appraisal clause allowing either party to demand appraisal when they cannot agree on the amount of loss. Illinois courts have enforced these clauses consistently, treating appraisal as a form of alternative dispute resolution limited to the amount of loss, not coverage.

Scope of Appraisal in Illinois

Illinois appellate courts have clarified that appraisal can address questions such as repair versus replacement scope, pricing, quantities, and depreciation, so long as the underlying coverage is not in dispute. Coverage questions, including causation disputes where the carrier argues the damage was not caused by a covered peril, are not appraisable and go to court.

How to Invoke Appraisal

• Send a written demand citing the policy's appraisal provision
• Name your appraiser in the demand
• Give the carrier the time specified in the policy to name its appraiser
• The two appraisers select an umpire; if they cannot agree, the policy or a court appoints one

A well-documented supplement, built the right way, is the foundation for a successful appraisal. If you want a walkthrough, see our supplement guide and adjuster estimate review checklist.

215 ILCS 5/155 Statutory Bad Faith Remedy

Illinois does not recognize a common-law tort of bad faith against an insurer. Instead, the state provides a statutory remedy at 215 ILCS 5/155 for vexatious and unreasonable conduct by an insurer. For practical purposes, 5/155 is Illinois's bad faith law.

What 5/155 Allows

When an insurer's delay in settling a claim or refusal to pay is found by the court to be vexatious and unreasonable, the court may award the insured, in addition to the amount due under the policy, the following.

• An amount not to exceed 60,000 dollars (the statutory cap as currently set)
• A penalty calculated as an amount equal to the excess of the amount at issue over certain floors, scaled by duration of delay, up to 60 percent of that amount
• Reasonable attorney fees
• Other costs

Under 215 ILCS 5/155, where the company's action or delay in settling a claim is vexatious and unreasonable, the court may allow attorney fees and additional sums to the insured. The statute serves as a deterrent to bad-faith claim handling by carriers writing property policies in Illinois.

What Vexatious and Unreasonable Means

Illinois courts apply a totality-of-the-circumstances test. Mere good-faith disagreement over value or coverage does not trigger 5/155. Genuine dispute, reasonable investigation, and colorable defenses generally defeat a 5/155 claim. But adjusters who ignore evidence, refuse to negotiate, misrepresent policy terms, or drag out a claim with no legitimate basis can put the carrier in the 5/155 zone.

How Contractors Contribute to a 5/155 Record

• Timestamped written communication logs
• Photo documentation predating and post-dating the loss
• Supplement submissions with itemized pricing justifications
• Formal written responses to any coverage denials with citations to the policy language

Suit Limitations, Notice, and Depreciation Deadlines

Illinois policies and statutes impose several deadlines that quietly close windows on legitimate claims.

Policy Suit Limitations

Most Illinois homeowner policies contain a one-year or two-year suit limitation clause. Illinois courts enforce these provisions when clearly drafted, though some courts have examined whether the clause was triggered by the date of loss or the date of the coverage decision. The safe interpretation: assume the clock runs from the date of loss unless the policy says otherwise.

Notice of Loss

Illinois policies require prompt notice of loss. Courts treat late notice as a potential coverage defense for the insurer but often require the insurer to show prejudice before denying coverage on that ground alone. The practical rule: report the loss as soon as the damage is identified. Do not let storm dates get stale.

Recoverable Depreciation Deadlines

Illinois does not have a statutory deadline for completing work and collecting recoverable depreciation. Each policy controls. Common deadlines range from 180 days to two years from the date of loss or first payment. Read the policy. Calendar the date. Communicate it to the homeowner in writing.

For the mechanics of how recoverable depreciation actually moves through a claim, see our ACV vs. RCV guide.

Illinois Written Contract and Cancellation Rules

Beyond the disclosures required by Public Act 96-1000 and the Roofing Industry Licensing Act, Illinois home repair contracts are governed by the Home Repair and Remodeling Act (815 ILCS 513) and the general Home Solicitation rules.

Home Repair and Remodeling Act

• Written contract required for any home repair or remodeling work over a threshold dollar amount.
• Home Repair: Know Your Consumer Rights pamphlet must be provided to the homeowner before work begins.
• Itemized pricing for the work to be performed.
• No verbal-only agreements for covered work.

Insurance-Triggered Cancellation Right

When the payment is tied to insurance proceeds, the homeowner has a right to cancel if the insurer denies all or part of the claim. The contract must disclose this right conspicuously, and the contractor must return deposits less the value of work actually done within the statutory timeframe after cancellation.

Contingency Contracts

Contracts tied to insurance approval are widely used in Illinois and generally enforceable when they comply with all of the above. Lock your scope and pricing to what the carrier approves, state the homeowner's responsibility for the deductible, and include every required disclosure.

Matching and Scope Arguments in Illinois

Illinois does not have a dedicated matching statute. Matching arguments in Illinois roofing claims turn on policy language, usually some version of "replace with materials of like kind and quality." When the damaged shingle is discontinued, the current-stock equivalent is a noticeably different color, or weathering has created a visible mismatch, Illinois contractors regularly secure full slope or full elevation replacements.

Evidence That Wins Matching Arguments

For a deeper dive on building a matching argument that holds up in appraisal, see our guide on matching and partial roof denials. Comparing Illinois's common-law approach to other states' statutory rules is also useful. Our Oklahoma roofing claim laws guide and Georgia roofing claim laws guide cover analogous frameworks in those states.

A Compliant Illinois Claim Workflow

Here is how a properly run Illinois roofing insurance claim should unfold from lead to final payment.

1. Verify your Illinois roofing license is active. Check the IDFPR portal before signing any contract.
2. Inspect and document the damage. Overview photos, test squares, collateral damage, interior evidence where relevant.
3. Sign a compliant contract. Written, with all Public Act 96-1000 disclosures, Home Repair and Remodeling Act pamphlet, cancellation rights, and itemized pricing.
4. Never promise to waive the deductible. No marketing claim, no verbal statement, no handshake arrangement.
5. Report the loss promptly. Help the homeowner get the claim reported and meet the adjuster on site.
6. Review the adjuster's estimate. Compare to your own scope and to current Xactimate pricing. Identify missed line items and underpriced materials.
7. Submit a written supplement. Itemized, cited, supported by photos, codes, and matching documentation where applicable.
8. Demand appraisal when appropriate. For amount-of-loss disputes where the carrier will not move.
9. Document every delay and lowball offer. Your records feed a potential 215 ILCS 5/155 claim if the carrier crosses the line.
10. Complete the work to approved RCV scope. Do not cut scope to fit the first check.
11. Submit completion documentation. Certificate, final invoice, photos, and lien waiver where required.
12. Collect the full deductible and the remaining balance. Clean records. Clean invoices. No games.

A Note on Legal Change

Laws change. The Illinois General Assembly amends the Insurance Code and the Roofing Industry Licensing Act regularly. New appellate decisions refine the meaning of vexatious and unreasonable under 215 ILCS 5/155 and continue to shape matching doctrine. IDFPR rules under 225 ILCS 335 are updated through administrative rulemaking. This guide reflects the state of Illinois roofing claim law as of April 2026 and is informational only. It is not legal advice. Before you rely on any specific statute or case in a live claim or dispute, verify the current text at the Illinois Compiled Statutes and consult a licensed Illinois attorney.

What does not change is the discipline that wins Illinois claims. Valid license. Written contracts with every required disclosure. Thorough inspection and documentation. Honest pricing. No deductible games. Timely and specific supplements. And a paper trail that, if you ever need it, supports a 5/155 claim or an appraisal demand. Illinois rewards contractors who respect the rules. It punishes the ones who think they are optional.