Illinois: Prejudgment Interest Rules

The short answer

Illinois answers this question with two statutes that have nothing to do with each other. A debt on a written instrument — a contract, a promissory note, an insurance policy, or a similar writing — draws 5% a year under the Interest Act once the amount owed is fixed or easily calculated. Personal injury and wrongful death claims are a completely different, and much newer, story: Illinois had no prejudgment interest at all for these tort claims until a 2021 law changed that for the first time in the state's history. That law gives injured plaintiffs 6% a year, but only from the date the lawsuit was filed — not the date of the injury — capped at five years of total accrual, and never available against a government defendant.

Requirements one by one

Governing law

A written-instrument debt is governed by the Interest Act, 815 ILCS 205/2, a statute that has existed in some form for well over a century. Personal injury and wrongful death claims run on a completely different, much newer statute: 735 ILCS 5/2-1303(c), added by a 2021 amendment (Public Act 102-6) to the Code of Civil Procedure's judgment-interest section. Before that amendment took effect on July 1, 2021, Illinois simply did not recognize prejudgment interest in tort actions for personal injury or wrongful death at all — only postjudgment interest applied once a verdict was entered. An Illinois Appellate Court panel upheld the new tort-side rule against a wide-ranging constitutional challenge in Cotton v. Coccaro, 2023 IL App (1st) 220788, and that decision remains the controlling, unreversed authority statewide.

Interest rate

A written-instrument debt draws 5% a year under the Interest Act. A personal injury or wrongful death judgment instead draws 6% a year under § 2-1303(c). Neither of these is the same as Illinois's separate, ordinary postjudgment interest rate — 9% a year on any civil judgment once entered, or 6% a year if the judgment debtor is a unit of local government or other governmental entity — which applies after judgment regardless of claim type.

When interest starts running

For a written-instrument debt, interest starts running once the money "become[s] due" — the date the debt was actually owed, not necessarily the date the instrument was signed. For a personal injury or wrongful death claim, interest starts running "on the date the action is filed," a rule that surprises a lot of people: it is NOT the date of the injury, the date of the accident, or the date the defendant was served. Total prejudgment interest accrual on a personal injury or wrongful death claim is also capped: it cannot run for more than five years no matter how long the case takes.

Contract vs. tort claims

These aren't variations on one theme; they're two statutes that don't overlap. A written-instrument debt is a matter tested under the Interest Act's liquidated-sum standard, developed over decades of case law. A personal injury or wrongful death claim is a matter created from scratch by a 2021 amendment that has no relationship to the Interest Act at all — Illinois courts have specifically declined to expand § 2-1303(c)'s reach into contract or unjust-enrichment claims, keeping the two statutes' scopes distinct. Before 2021, a personal-injury plaintiff got nothing for the years a case took to resolve, while a plaintiff suing on a written contract could recover 5% interest the whole time — an asymmetry the 2021 law was written specifically to close.

Mandatory or discretionary

For a written-instrument debt, Illinois courts have held that prejudgment interest is available once the underlying sum is liquidated or readily calculable — "prejudgment interest will be awarded for amounts due on an instrument in writing only if the amount was liquidated or was easily computed," though the debt can still be determinable, and interest still awardable, even where the parties genuinely dispute liability. Illinois courts of equity (chancery) can separately award prejudgment interest on equitable grounds even without a statute, a different and more discretionary route. For a personal injury or wrongful death claim, § 2-1303(c) uses mandatory language — the plaintiff "shall recover" interest — and Illinois courts have described the award as "a statutory additur," a ministerial calculation for the court rather than a jury question, applied automatically once a plaintiff wins a verdict.

Simple or compound

Neither statute contains language authorizing compound interest, and both are administered as simple interest applied to a fixed principal. For the personal injury and wrongful death rate in particular, the statute's own five-year accrual cap is commonly described as capping total prejudgment interest at 30% of the judgment — a figure that only works out arithmetically (6% multiplied by 5 years) if the rate is simple and not compounding.

Claims against the government

Personal injury and wrongful death claims against a government defendant get no prejudgment interest at all: § 2-1303(c) states plainly that "neither the State, a unit of local government, a school district, community college district, nor any other governmental entity is liable to pay prejudgment interest in an action brought directly or vicariously against it by the injured party." That exemption doesn't extend to postjudgment interest, though — a government defendant still pays postjudgment interest on the underlying verdict, just at a lower 6% rate instead of the ordinary 9%.

Other exceptions

A defendant can cut off further prejudgment interest by making a qualifying written settlement offer within 12 months of the case being filed, left open for at least 90 days. If the plaintiff doesn't accept that offer and the eventual judgment doesn't exceed it, no prejudgment interest is added at all; if the judgment does exceed the offer, interest is calculated only on the difference, not the full judgment. Punitive damages, sanctions, statutory attorney's fees, and statutory costs are excluded from the amount interest is calculated on. A voluntary dismissal and refiling tolls the accrual clock for the gap between the two filings, so a plaintiff who dismisses and refiles doesn't lose credit for time already accrued.

What trips people up

The single biggest surprise is how recent this is for tort claims. A personal injury lawyer who assumes Illinois has "always" had prejudgment interest, or who looks at an older case for guidance, is working from a legal landscape that didn't exist before July 1, 2021 — cases resolved under the old rule got zero prejudgment interest no matter how long they took.

The accrual date is also a common trap: prejudgment interest on a personal injury or wrongful death claim starts on the date the lawsuit is filed, not the date of the underlying injury or accident. A case that sits for two years before anyone files suit doesn't earn interest for those two years; the clock only starts once the case is actually in court.

The government exemption is easy to miss in a case with mixed defendants. If a plaintiff sues both a private company and a government entity for the same incident, the private defendant can end up owing 6% prejudgment interest on its share of the judgment while the government defendant owes none at all on its own share — a split that can complicate settlement negotiations between co-defendants.

Common questions

Does Illinois have prejudgment interest for a car accident case?
Yes, but only since July 1, 2021. The rate is 6% a year, starting from the date the lawsuit was filed (not the date of the accident), capped at five years of total accrual.

What about interest on an unpaid contract or invoice?
That's governed by a different law, the Interest Act, at a different rate: 5% a year once the amount owed is fixed or easily calculated, running from the date the money became due.

Can I get prejudgment interest if I sue a city or the state of Illinois for a personal injury?
No. Section 2-1303(c) expressly exempts the State and all units of local government, school districts, and other governmental entities from the personal-injury prejudgment interest rule.

Is the 6% personal-injury prejudgment interest rate constitutional?
Yes, as of the only appellate decision to address it directly. In Cotton v. Coccaro (2023), the Illinois Appellate Court rejected jury-trial, due-process, and special-legislation challenges to the 2021 law, and no higher Illinois court has overturned that decision.

Statutes and sources

• 815 ILCS 205/2 (Interest Act) — "Creditors shall be allowed to receive at the rate of five (5) per centum per annum for all moneys after they become due on any bond, bill, promissory note, or other instrument of writing; on money lent or advanced for the use of another; on money due on the settlement of account from the day of liquidating accounts between the parties and ascertaining the balance; on money received to the use of another and retained without the owner's knowledge; and on money withheld by an unreasonable and vexatious delay of payment." Accessed 2026-07-05: https://www.ilga.gov/Legislation/ILCS/Articles?ActID=2322&ChapterID=67&Print=True
• 735 ILCS 5/2-1303(a) (postjudgment interest) — "judgments recovered in any court shall draw interest at the rate of 9% per annum from the date of the judgment until satisfied or 6% per annum when the judgment debtor is a unit of local government ... a school district, a community college district, or any other governmental entity." Accessed 2026-07-05: https://www.ilga.gov/documents/legislation/ilcs/documents/073500050K2-1303.htm
• 735 ILCS 5/2-1303(c) (personal injury/wrongful death prejudgment interest) — the plaintiff "shall recover prejudgment interest on all damages, except punitive damages, sanctions, statutory attorney's fees, and statutory costs," at "6% per annum," accruing "on the date the action is filed" and "for no longer than 5 years," with the express governmental exemption quoted above. Accessed 2026-07-05: https://www.ilga.gov/documents/legislation/ilcs/documents/073500050K2-1303.htm
• Cotton v. Coccaro, 2023 IL App (1st) 220788 — upheld the constitutionality of § 2-1303(c) against jury-trial and due-process challenges, holding that "prejudgment interest ... is not a component of tort damages but a statutory additur," and that "[u]ntil the 2021 amendment, Illinois did not permit recovery of prejudgment interest in personal injury and wrongful death actions." Accessed 2026-07-05: https://www.courtlistener.com/opinion/9405334/cotton-v-coccaro/
• New Hampshire Insurance Co. v. Hanover Insurance Co., 296 Ill. App. 3d 701 (1st Dist. 1998) — confirmed prejudgment interest under the Interest Act "is not recoverable absent a statute or agreement providing for it," and requires a liquidated or easily computed sum. Accessed 2026-07-05: https://www.courtlistener.com/opinion/2052902/