Uninsured Motorist Coverage

Illinois law requires that all automobile liability insurance policies issued for any motor vehicles registered or principally garaged in this state contain provisions for uninsured motorist coverage. The law also sets minimum levels for the coverage limits, which are currently $20,000 per person and $40,000 per occurrence.

The purpose of the Illinois insurance law is to place the insured in substantially the same position that he or she would occupy if an uninsured or a hit-and-run driver had been minimally insured. To that end, the law requires that an insurer provide its prospective insureds with sufficient information in order to allow them to make an informed, intelligent decision about their automobile insurance coverage. Under the law, the insurer must provide uninsured motorist coverage equal to the bodily injury liability limits of the policy unless an insured specifically rejects such coverage.

A recent case decided by the Illinois Appellate Court illustrates the importance of such laws. A husband purchased automobile insurance for the family vehicle, with his wife listed as a second driver. After reviewing the appropriate information regarding the uninsured motorist coverage on the policy, the husband elected minimum coverage rather than coverage equal to the bodily injury liability limits of the policy. The policy contained an automatic renewal provision.

Some time later, the husband died and his wife purchased a new car and obtained insurance on the car as the primary driver. Nevertheless, the insurer did not treat this as a new policy, giving it the same coverage as the previous policy on the other car that listed her husband as the primary driver. Most notably, the insurer failed to inform the wife of her options for uninsured motorist coverage.

The wife was killed by an uninsured motorist in a collision. A passenger in her vehicle was also severely injured. The representative of the late wife's estate and the injured passenger sued the insurance company, seeking to reform the policy so that the coverage limits were equal to the bodily injury liability limits of the policy, $100,000/$300,000, rather than the statutory minimum of $20,000/$40,000 selected by her late husband on the prior policy. Such an increase conforms with the law that requires insurers to provide such coverage in the absence of an election by the insured to accept a lower amount.

The court agreed with the plaintiffs' position that the insurance policy should be reformed with the increased policy limits. It rejected the notion that the policy was simply a renewal and an addition of a new vehicle rather than a new policy in the sole name of the wife. Thus, each of the injured insureds received the maximum recovery provided by law.

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