diff --git a/litellm/proxy/proxy_server.py b/litellm/proxy/proxy_server.py
index 8aab2fb3818..16b9ed9288e 100644
--- a/litellm/proxy/proxy_server.py
+++ b/litellm/proxy/proxy_server.py
@@ -2163,40 +2163,35 @@ def _write_health_state_to_router_cache(
                 sum(1 for s in states.values() if not s.get("is_healthy")),
             )
 
-        # Only feed health check failures into the cooldown pipeline when
-        # allowed_fails_policy is configured. Without it, cooldown is not the
-        # routing exclusion mechanism and triggering it would be a
-        # backwards-incompatible behavioral change for existing users.
-        if llm_router.allowed_fails_policy is not None:
-            for endpoint in unhealthy_endpoints:
-                model_id = endpoint.get("model_id")
-                if not model_id:
-                    continue
+        for endpoint in unhealthy_endpoints:
+            model_id = endpoint.get("model_id")
+            if not model_id:
+                continue
 
-                original_exception = _exceptions.get(model_id)
-                if original_exception is None:
-                    continue
+            original_exception = _exceptions.get(model_id)
+            if original_exception is None:
+                continue
 
-                exception_status = getattr(original_exception, "status_code", 500)
+            exception_status = getattr(original_exception, "status_code", 500)
 
-                if llm_router.health_check_ignore_transient_errors and exception_status in (
-                    429,
-                    408,
-                ):
-                    continue
+            if llm_router.health_check_ignore_transient_errors and exception_status in (
+                429,
+                408,
+            ):
+                continue
 
-                increment_deployment_failures_for_current_minute(
-                    litellm_router_instance=llm_router,
-                    deployment_id=model_id,
-                )
+            increment_deployment_failures_for_current_minute(
+                litellm_router_instance=llm_router,
+                deployment_id=model_id,
+            )
 
-                _set_cooldown_deployments(
-                    litellm_router_instance=llm_router,
-                    original_exception=original_exception,
-                    exception_status=exception_status,
-                    deployment=model_id,
-                    time_to_cooldown=llm_router.cooldown_time,
-                )
+            _set_cooldown_deployments(
+                litellm_router_instance=llm_router,
+                original_exception=original_exception,
+                exception_status=exception_status,
+                deployment=model_id,
+                time_to_cooldown=llm_router.cooldown_time,
+            )
 
     except Exception as e:
         verbose_proxy_logger.warning(