Prejudgment interest in Illinois changed what delay costs an insurance company. For decades, a carrier that dragged an injury case out for three years paid the same verdict it would have paid in year one. Time worked for the defense. Since July 2021, a verdict in an injury or wrongful death case grows by 6 percent a year while the lawsuit sits. The rule has conditions, and a few of them decide whether any interest applies at all.
What follows covers which cases qualify, when the clock starts, what the interest skips, and how one written settlement offer can shrink it.
Which Cases Earn Interest
The rule lives in subsection (c) of 735 ILCS 5/2-1303. It reaches lawsuits for personal injury or wrongful death. The legal theory does not matter much. Negligence, willful and wanton conduct, intentional conduct, and strict liability all qualify.
That list covers nearly every case an injury firm files. A crash on the Eisenhower fits. So does a fall at a store, a defective tool, or a death at a care facility.
The rule took effect on July 1, 2021. For an injury that happened before that date, interest starts on the later of the filing date or the effective date.
The Clock Starts at Filing
This detail surprises people most. Interest does not run from the day of the injury. It begins on the day the lawsuit goes on file.
Months of negotiation before suit therefore earn nothing. An injured person who spends eighteen months trading letters with an adjuster collects no interest for that stretch. The statute rewards the person who files, and it gives insurers a reason to settle early in the suit.
Filing early has costs, and it does not suit every claim. A person still in treatment may not know the full value of the case yet. Those two goals pull against each other, and the right moment depends on the injury.
The lawsuit itself still has a deadline. Most Illinois injury claims must reach a courthouse within two years under 735 ILCS 5/13-202.
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What the Interest Leaves Out
The 6 percent applies to the judgment, with four pieces removed first. Punitive damages earn no interest. Neither do sanctions, statutory attorney fees, or statutory costs.
Everything else counts. Medical bills, lost income, and pain and suffering all sit inside the base. A challenge argued that interest on future losses made no sense. The Appellate Court rejected that challenge in Cotton v. Coccaro in 2023 and upheld the statute.
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How a Settlement Offer Shrinks the Number
Lawmakers gave defendants one way to limit the exposure. A written settlement offer made within 12 months of filing changes the math. The injured person has 90 days to accept it. The offer has to come from the defendant, and only the highest one counts.
Suppose the plaintiff turns the offer down and later wins more at trial. Interest then runs only on the gap between the judgment and the highest timely offer. Suppose the verdict comes in at or below the offer. No prejudgment interest applies at all.
Numbers make it concrete. Take a $300,000 verdict reached two years after filing. With no offer on the table, interest adds roughly $36,000. Now assume the insurer offered $200,000 in writing during the first year. Interest covers only the $100,000 difference and adds roughly $12,000.
An insurer cannot game the rule by pulling an offer back. The statute says a withdrawn offer does not count as a rejected one.
Limits Built Into the Rule
Three limits matter in practice. First, interest stops accruing after five years. A case that runs longer earns nothing more. Five years sounds generous, yet complex malpractice and product cases can reach it.
Second, a voluntary dismissal pauses the clock. Plaintiffs in Illinois may dismiss a case and file it again within a year. No interest builds between the dismissal and the new filing.
Third, government defendants owe none of it. The State, cities, school districts, and other public bodies sit outside the rule. A claim against a transit agency or a city crew earns no prejudgment interest, however long the case takes.
Arbitration Awards Count Too
Many smaller injury cases in Cook County and the collar counties go to court arbitration panels before trial. The Illinois Supreme Court addressed those cases in Jordan v. Macedo in 2025. A plaintiff who did not ask the arbitrators for interest has not waived it. The trial court can add interest when it enters judgment on the award.
What This Means for Your Case
The rule changes strategy on both sides. A defendant who knows the claim has value now has a reason to make a real offer in the first year. A plaintiff has to weigh that offer carefully, because rejecting it resets the interest math.
Large cases feel the rule most. A $2 million verdict entered three years after filing carries roughly $360,000 in interest when no timely offer exists. That figure holds an insurer’s attention in a way no demand letter does.
Keep a copy of every written offer and the date it arrived. Those dates control the calculation later. Verbal numbers floated on a phone call do not trigger the offer rule, since the statute requires a writing.
Interest also never replaces proof. It multiplies a verdict that the evidence has to earn first.
Is an insurer stalling on your claim? Our car accident team files suit when delay stops serving you, and we track every written offer against the interest rule. The same statute applies to a truck accident case against a motor carrier and to a wrongful death claim brought by a family. We handle all three from Chicago and Aurora.
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