Taking on an Insurance Company When There is an Ambiguity in Your Auto Policy Following a Crash in Illinois

In many auto accident cases, insurance policies and insurance coverage will play an important role in securing payment for the damages you suffered. That inevitably means dealing with, and sometimes battling in the courts against, insurance companies. The law has rules designed to protect consumers when it comes to insurance coverage and dealing with insurance companies, which is just one of many reasons why it is so important to make sure you have skilled Illinois car accident counsel on your side before you take on an insurance company in court.

A case from southern Illinois recently provided an example of how the law can help you in the case of an ambiguous insurance policy. A Massac County teen, Austin, and his passenger, Lesley, were hit by an underinsured driver in June 2015. Both the driver and the passenger settled with the at-fault driver for $25,000. Austin and Lesley’s total damages were far greater than $25,000, however.

The pair then pursued Austin’s parents’ insurer. They asserted that the insurance policy that the parents had signed allowed for $75,000 of underinsured motorist coverage and that, since there were four vehicles on the policy and the insurer charged four separate premiums, they were entitled to seek payment of $300,000 in underinsured motorist coverage.

The insurance company alleged that Austin and Lesley’s lawsuit claims misread what the insurance policy allowed. According to the insurer, the correct interpretation of the policy clearly was that underinsured/uninsured motorist coverage was capped at $25,000 per person and $50,000 per incident, and Austin and Lesley’s attempt to multiply the coverage cap by the family’s four vehicles amounted to stacking coverage, which the policy explicitly prohibited.

The plaintiffs contended that whether or not stacking was allowed was actually ambiguous based upon the terms of the policy, but the trial court ruled in favor of the insurance company.

The appellate court reversed that ruling and decided to revive Austin and Lesley’s case. The outcome in favor of the injured driver and passenger highlights a key element of Illinois law when it comes to insurance companies. The law says that, when an insurance policy is clear and unambiguous, the insurer is entitled to demand enforcement of the policy as written. If, however, the language in the policy is ambiguous and not clear, that ambiguity must be resolved in favor of the insured and against the insurance company.

In this case, the appellate court determined that the insurance policy that Austin’s parents signed was ambiguous regarding whether or not coverages could be stacked. Specifically, the court reached this decision after noting that Illinois law has clearly established that, even if a policy says within it that stacking is not allowed, the inclusions of “a declarations page that prints the policy limit more than once could reasonably be interpreted as providing a policy limit that is the sum of the printed limits.”

In other words, the way this insurance company had formatted its declarations page made it less than clear whether or not stacking was allowed. That lack of clarity created an ambiguity, and the law resolves an ambiguity in favor of insureds. That meant that one reasonable interpretation of the insured policy that Austin’s father took out was one that allowed for $50,000 of underinsured motorist coverage times four, or $200,000. As a result, each of Austin and Lesley was entitled to $200,000 of underinsured motorist coverage.

If you have been hurt in an auto accident and find yourself in a battle with an insurance company, don’t go it alone, The experienced Chicago car accident attorneys at Katz, Friedman, Eisenstein, Johnson, Bareck & Bertuca have been helping drivers and passengers for many years as they go up against insurance companies. To set up a free case evaluation, contact us at 800-444-1525 or through our website.

More Blog Posts:

How an Injured Illinois Pedestrian’s $9M Jury Verdict Survived After an Appeal, Chicago Injury Attorneys Blog, Jan. 30, 2018

Recent Motorcycle Accidents Highlight Dangers Faced by Illinois Motorcyclists and Their Passengers, Chicago Injury Attorneys Blog, Jan. 18, 2018