Experimental studies showed that the transition from the last quantum Hall plateau in the integer quantum Hall effect terminates with a unique insulating phase. This phase is characterized by the divergent of the longitudinal resistivity with decreasing temperature, while the Hall resistivity remains quantized to its value in the last plateau. This is in contradiction to the predictions of the non-interacting electron theory. Therefore, it was suggested that this quantum Hall Insulator phase may be related to incoherent scattering events. We show that by including rare incoherent scattering events the quantum Hall insulator becomes a stable phase. The theory predicts a non-monotonic dependence of the Hall resistance on system size or temperature. Other aspects of the experiments are studied within our approach.