Appellate Court Rejects Car Accident Victims’ Appeal for Failure to Comply with Insurance Policy’s Demand for Arbitration Requirements

Insurance policies can be pretty confusing, especially if you are trying to cover medical bills after a car accident. The seasoned team of car accident lawyers at Therman Law Offices has helped many different Chicago area residents with figuring out their rights after an accident. We will negotiate with insurance companies on your behalf and fight to make sure you get the outcome that you deserve.

The Illinois Court of Appeal recently handed down a decision in a case involving a dispute over an uninsured/underinsured motorist (UIM) policy. The insured was involved in an accident caused by another driver. The other driver had an insurance policy that provided liability coverage in the amount of $25,000 per person. The other driver’s insurance company offered to pay the full policy limits to the insured in exchange for a release of liability, but the insured concluded that her damages were more than $25,000.

The plaintiff filed a lawsuit against her own insurance company alleging that it failed to adhere to the terms of her policy agreement by failing to pay for her damages and medical costs in accordance with her UIM policy. The insurer filed a motion to dismiss on the basis that the insured did not submit a written demand for arbitration in accordance with the policy. The trial court ultimately agreed with the insurance company and dismissed relevant portions of the insured’s complaint. The trial court specifically noted that the policy required the insured to submit a written demand if the insured and insurer disagreed about the amount of coverage she was owed.

A few years later, the insured filed a motion for reconsideration based on new evidence that consisted of a letter from her attorney to the insurer that notified the insurer that the attorney represented the insured in this matter. The court denied the motion on the basis that the letter said nothing about arbitration.

The insured appealed arguing that the lower court did not interpret the policy language correctly. According to the insured, a written demand is not required unless the parties are involved in an ongoing dispute about whether the insured is entitled to receive UIM benefits. Looking at the plain language of the policy, the appellate court rejected this argument. The policy language makes it clear that the insured must submit a written demand for arbitration.

It also agreed with the lower court that the letter did not constitute proper notice because it failed to mention anything about arbitration. It was simply notice to the insurer that the insured had retained legal counsel. The letter may have provided notice to the insurer that the insured intended to bring a UIM claim, but nothing more.

If you were hurt in a car accident, you deserve compassionate and responsive legal counsel. At Therman Law Offices, we proudly serve injury victims throughout the area in a wide variety of car accident cases including truck accidents and motorcycle accidents. We provide a free consultation to discuss your situation and how we can assist you. Call us now at 773-545-8849 or contact us online.