Additional Uninsured Motor Vehicle Coverage Limits and Requirements
In Alshwaiyat v. American Service Ins. Co, Hatem Alshwaiyat (“Alshwaiyat”) was a taxi driver who sought declaration that a policy of automobile insurance issued to his employer, Mojo Enterprises (“Mojo”) provided $500,000 in underinsured motorist (“UIM”) coverage for an automobile accident. On June 17, 2008, Alshwaiyat was a taxi driver employed by Mojo when he was involved an accident with a vehicle operated by Robert Pas. As a result of this accident, Alshwaiyat suffered significant physical injuries; and his wife, a passenger in the taxi, suffered injuries that resulted in her death. Claims against Mr. Pas for Alshwaiyat’s injuries and his wife’s wrongful death were settled for $100,000 each. Alshwaiyat alleged that he and Mojo were both insured under an automobile insurance policy issued to Mojo by American Service Insurance (“ASI”). The policy was effective January 1, 2008, through January 1, 2009. The insurance policy allegedly included a $500,000 in liability coverage for bodily injury and property damage. Alshwaiyat alleged that Mojo never reject the uninsured motorist (UM) and underinsured motorist (UIM) coverage in an amount equal to $500,000, and therefore the policy must be construed to provide for $500,000 in underinsured motorist coverage. ASI had indicated its belief that the insurance policy issued to Mojo did not provide any UIM coverage for the accident.
The ASI policy provided a combined single limit (CSL) of $300,000 in bodily injury and property damage liability coverage. In the course of applying for this policy, Mojo’s president was informed of Mojo’s right to UM or UIM coverage in an amount equal to the bodily injury and property damage coverages. Mojo’s president signed a written rejection of such coverage. The original policy provided UM coverage in the amount of $20,000 per person and $40,000 per accident. It did not provide for any coverage for UIM coverage. ASI issued Mojo a subsequent renewal policy that covered the period of January 1, 2008, through January 1, 2009, and provided the same amount of liability (a $500,000 CSL) and UM coverage ($20,000 per person and $40,000 per accident). The policy was in effect at the time of the accident. Mojo did not sign another written rejection of higher UM or UIM coverage in connection with either the endorsement increasing the liability limits or the renewal policy, nor did Mojo make a specific request for any additional UM or UIM coverage.
The court reviewed whether the second policy issued by ASI effective January 1, 2008, through January 1, 2009, was a renewal of the prior policy; and if it was a renewal, whether the insured was required to provide any greater UM or UIM coverage in the second policy. The Insurance Code specifically requires that all policies of liability insurance must provide UM insurance. Such UM insurance must provide coverage limits that are, at a minimum, equal to the statutory minimums.
The court held that the second policy was self-identified on its declaration page as being a “RENEWAL.” The policy was identified by a policy number largely identical to the number that identified the original policy: it was issued to Mojo, the same named insured listed in the original policy; it covered the same drivers insured in the original policy; it contained policy language that was identical to the policy language contained in the original policy; it provided the same coverage limits as the original policy; and it came into effect upon the expiration of the six-month term of the original policy. For these reasons, it was evident that the second policy was a “renewal” policy for purposes of the paragraph (2) of Section 143a-2, which allowed any named insured to reject UM or UIM coverage in excess of the statutory minimums. Section 143a-2 further provided that an insurer need not provide in any renewal, reinstatement, reissuance, substitute, amended, replacement or supplementary policy, coverage in excess of that elected by the insured in connection with a policy previously issued, unless the insured subsequently makes a written request for such coverage. ASI was not required to provide any greater UM or UIM coverage in the second policy, so long as that policy was a “renewal, reinstatement, reissuance, substitute, amended, replacement or supplementary policy.
Alshwaiyat v. American Service Ins. Co., 2013 IL App (1st) 123222, 986 N.E.2d 182, 369 Ill.Dec. 233 (Ill.App. 1 Dist. 2013).
