Illinois Court of Appeal Issues Opinion Interpreting UIM Policy Benefits in Car Accident Insurance Claim

When you are injured in a motor vehicle accident, you may be able to receive insurance benefits from the policies involved in the crash including your insurer policy and the at-fault driver’s policy. This can sound like a straightforward process, but all too often an insurance company fails to play by the rules. Also, there are a number of rules that apply to your insurer’s ability to recoup any benefits paid to you from a settlement or judgment entered in your favor in a corresponding civil case. The seasoned Chicago car accident lawyers at Therman Law Offices are available to assist you with understanding your right to insurance coverage following a car accident.

Recently, the Illinois Court of Appeal considered a case in which the plaintiff appealed two orders of summary judgment entered in favor of the defendant, an insurance company. The plaintiff had filed an action seeking a declaratory judgment asking the court to interpret an insurance policy that was issued to the defendant and active at the time the parties got into an accident. The plaintiff suffered injuries when she was hit by an underinsured motorist. Her damages totaled $350,000.

The insurer for the at-fault motorist provided the policy limits of $100,000. The plaintiff then applied for underinsured motorist coverage with her own insurance company to recover the outstanding damages, including a $250,000 coverage limit and $100,000 in medical payments. Her insurer provided the $100,000 medical payment coverage. It then offset the $100,000 paid by the at-fault driver’s insurance company and the $100,000 in medical payments to conclude that the plaintiff was entitled to $50,000. The plaintiff declined the offer and filed an action seeking a declaratory judgment from the court explaining the proper interpretation of the policy.

The trial court issued a ruling stating that the insurer was entitled to setoffs for medical benefits that it paid to the plaintiff pursuant to the policy’s limits. The plaintiff appealed. On review, the appellate court first stated that the purpose of underinsured motorist coverage is to provide policyholders with protection for the difference between the insured’s claim and the amounts available from the underinsured driver. It also stated that UIM coverage is not meant to allow the insured to recover amounts from the insurer that are in excess of the coverage that the UIM policy provides.

Illinois law holds that the maximum amount that can be paid under an agreement for a UIM settlement shall not exceed the amount by which the limits of the UIM coverage exceed the limits of the bodily injury liability insurance of the underinsured vehicle’s owner or operator. Applying the law to the case at hand, the appellate court concluded that the insurer was authorized to receive a credit for the $100,000 medical payments coverage. The appellate court affirmed the trial court’s ruling.

If you were injured in a car accident and have questions about whether you are entitled to compensation from the at-fault driver, contact our office today. Some insurers try to cut corners or take advantage of their insureds by refusing to provide coverage according to a policy’s terms. We provide a free consultation to discuss your situation and whether you may be entitled to compensation. Call now at 773-545-8849 or contact us online.

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