USA – ILLINOIS Trends and Developments Contributed by: Everett J. Cygal, Daniel J. Schufreider, Jasmine K. Dela Luna, Sarah M. Oligmueller and Christopher L. Gerardi, ArentFox Schiff LLP
Zhao v State Farm Fire & Cas. Co., 2025 IL App (2d) 240723 In Zhao v State Farm Fire & Cas. Co. , the Second Dis- trict Appellate Court held that a disagreement regard- ing the scope of covered damage may be resolved through appraisal. Ms Zhao submitted an insurance claim under her homeowner’s policy with State Farm for hail damage to her home. State Farm sent an estimate and issued an actual value payment for the replacement of gutters, downspouts and aluminium wraps on certain window frames and trim. Ms Zhao received a second assessment that determined the hail damage was extensive enough to require replace- ment of all windows, and she invoked her right to the appraisal process pursuant to the insurance contract. When State Farm refused to participate in the apprais- al process, Ms Zhao filed suit to compel State Farm to participate in the appraisal process. State Farm asserted that the alleged loss to the windows was not caused by hail damage, but rather by other conditions not covered under the policy, and thus, the appraisal process is not appropriate when the scope of cover- age is in dispute. The trial court compelled State Farm to partake in the appraisal process, reasoning that the dispute involved the amount of loss as opposed to the scope of coverage, and State Farm appealed. The Second District affirmed, finding that whether the windows were damaged by the hailstorm was an issue of loss, not coverage, and that “resolving some ques- tions of causation will be necessarily included in the appraisal process”. Gillespie v State Farm Fire and Casualty Insurance Company, 2025CH10454, Illinois Circuit Court, Chancery Division (Cook County) On 10 October 2025, the Illinois Attorney General, on behalf of the Director of Insurance, filed a chan- cery action to compel State Farm entities (including a reinsurance affiliate) to produce nationwide, zip code- level homeowner data under financial and market con- duct examination warrants. The complaint invokes the director’s examination powers and confidentiality sharing authorities across multiple Insurance Code provisions and seeks injunctive relief compelling pro- duction. State Farm objected to producing data about policies insuring properties located outside of Illinois on the grounds that the director might violate confi- dentiality protections for the data if State Farm pro-
The policy explicitly required a person to be “‘occupy- ing’ a covered ‘auto’” to trigger UIM coverage. Rely- ing on Galarza v Direct Auto Ins. Co. , 2022 IL App (1st) 211595, aff’d, 2023 IL 129031, which held that an occupancy requirement in a personal automobile policy violated Illinois public policy, Mr Rahimzadeh argued that Ace’s occupancy requirement also vio- lated Illinois public policy. The District Court, however, distinguished between commercial and personal auto- mobile policies and dismissed the case. The District Court relied on Stark v Illinois Emcasco Ins. Co. , 373 Ill. App. 3d 804 (2007), which upheld an occupancy requirement in a commercial automobile policy. The Seventh Circuit affirmed dismissal, holding that Mr Rahimzadeh was not entitled to UIM coverage under his employer’s commercial auto insurance policy. Tower Crossing Condo. Ass’n, Inc. v Affiliated FM Ins. Co., No 21 C 6228, 2025 WL 3063487 (N.D. Ill. Nov. 3, 2025) In Tower Crossing Condo. Ass’n, Inc. v Affiliated FM Ins. Co. , the District Court granted summary judgment in favour of Affiliated FM Insurance Company (“Affili- ated FM”), holding that Tower Crossing Condominium Association, Inc.’s (“Tower Crossing”) complaint was time-barred under the policy. The property policy required Tower Crossing to submit “signed and sworn proof of loss”. It required all lawsuits to be initiated within two years after the date of loss, which could be tolled “by the number of days between the date the proof of loss was filed until the date the claim is denied in whole or in part”. Before the suit limitations period was set to expire, Affiliated FM extended the deadline to file suit to 2 October 2021. The lawsuit was filed on 19 November 2021. Tower Crossing argued that the proof of loss they submitted on 1 October 2021 tolled the suit limitations period in the policy. Tower Cross- ing conceded, however, that the October submission affixed a notarised signature from an earlier, unsub- mitted draft of the proof of loss, but argued that the transferred signature met the policy’s “sworn” require- ment. The court disagreed, finding that the October document itself was not notarised. The court, there- fore, granted summary judgment in favour of Affiliated FM, reasoning that when an insurance policy calls for a “sworn” proof of loss, the insured must submit a notarised proof of loss “given under oath”.
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