One topic that makes our Chicago personal injury lawyers blood boil is motor vehicle insurance. All Illinois drivers are required to carry liability insurance with a minimum coverage of $20,000 per person, $40,000 per accident. This mandatory minimum amount of motor vehicle insurance is woefully inadequate.
Time and again, our car accident attorneys are faced with situations where our clients have been severely and permanently injured in a car accident caused by a negligent driver, with not enough insurance to compensate for the injuries. Most often in those situations, the negligent driver does not have significant personal assets to cover a verdict at trial, and the client is therefore limited to recovering the amount of the insurance policy limit of the negligent driver.
For this reason, we tell all our clients, like we tell our own family, to purchase substantial uninsured motorist (UM) and underinsured motorist (UIM) coverage, along with a substantial liability policy, to protect against this type of scenario in the future. UM/UIM allow an injured person to recover from their own insurance company when the negligent driver has inadequate liability insurance coverage. Uninsured motorist coverage applies when the accident was caused by someone with no insurance, or in hit-and-run car accidents. Underinsured motorist coverage applies when the accident was caused by someone who does not have enough insurance to cover all your costs.
In serious motor vehicle accidents, a person who sustains a severe traumatic brain injury or spinal cord injury may require substantial medical treatment for the rest of their life. In such catastrophic accidents, the purely economic damages, including past and future medical expenses and wage loss, can be several millions of dollars. This is why, to protect ones self against the unknown (which is the purpose of “insurance”), all motorists should purchase substantial liability and UM/UIM coverage.
Unfortunately, insurance brokers make their “real” money by signing up new insurance policies (often at insufficient coverage levels), and their incentive is to offer the motorist the cheapest policy, rather than the policy in the driver’s best interest. What’s worse, insurance companies have attempted to exclude as many people as possible from from UM/UIM coverage, and have denied claims based on “clever” language in their insurance policies.
In Schultz v. Illinois Farmers Insurance Co., No. 108038 (Ill. March 18, 2010), the Illinois Supreme Court examined the following question: does Illinois law permit insurers to issue motor vehicle liability policies in which passengers of a covered vehicle are afforded UM coverage but excluded from UIM coverage? Fortunately for Illinois motorists, the Court said “no.”
The plaintiff in Shultz was the independent administrator of the estate of a female passenger, who died in a multi-car crash. The negligent driver had only $100,000 in liability coverage (NOTE: still substantially more than the minimum coverage required), and the plaintiff settled with that driver’s insurance company for the policy limits.
The vehicle in which plaintiff was in at the time of the accident was insured by Farmers, and had a higher coverage limit of $250,000 for liability, UM and UIM claims. However, the policy expressly limited UIM coverage to the person to whom the policy was issued or a family member — in other words, not to passengers such as the plaintiff. Therefore, Farmers denied plaintiff’s claim to recover an additional $150,000 (up to the $250,000) in UIM coverage.
On appeal, the Illinois Supreme Court held that Farmer’s restrictive definition of UIM coverage violated Illinois law and was unenforceable. It therefore held that the $250,000 in UIM coverage should be available to the plaintiff under the policy.
The Court based its ruling on the fact that insurers must extend UM coverage to all persons who are insured under the policy’s liability provisions (including all “permissive user” drivers and passengers of the vehicle). As with UM coverage, UIM coverage must also extend to all those who are insured under the policy’s liability provisions. Therefore, Farmers’ attempt to define insureds for UIM purposes more restrictively than it does for purposes of liability and UM coverage violated Illinois law.
This case has a somewhat “happy” ending for the plaintiff — she may recover up to $250,000 for her injuries. Still, if her injuries are permanent; if she is paraplegic or quadriplegic; if she will need future medical care; if she cannot work; if she can not longer perform the activities she previously enjoyed; if she is in pain — $250,00 will not be nearly enough.
Moral of the story: Check to make sure you have substantial liability, UM and UIM coverage. Although it will cost you a few extra bucks to increase your coverage, it is money well spent, considering the risk.
For a Free Consultation with a top-rated Chicago personal injury lawyer with Passen & Powell, call us at (312) 527-4500.