Insured has Burden to Reject Higher Uninsured Motorist Coverage but Insurer is not Responsible to Make Offer of Higher Limits
In American Service Insurance Co. v. Iousoupov, Iouri Iousoupov (“Iousoupov”) was a driver for Car Service Company, Inc. (“CSC”), a taxi company. American Service Insurance Company (“ASI”) issued a commercial auto insurance policy to CSC. While the insurance policy provided liability coverage in the amount of $500,000 for a single limit per occurrence, the policy only contained coverage for uninsured and underinsured motorists of $20,000 per person/$40,000 per occurrence. Iousoupov, while driving a taxi for CSC, was injured in a collision involving what he claimed was an underinsured driver. Iousoupov made a claim with ASI for underinsured motorist coverage. ASI denied the claim, stating that the limits of the driver’s liability insurance policy were greater than the limits of ASI’s underinsured motorist coverage. Therefore, the underinsured motorist coverage was not triggered. ASI filed a declaratory judgment action. When ASI filed a motion for summary judgment they argued that the policy’s underinsured motorist coverage limits were valid because CSC had elected to reject higher coverage limits. The court granted summary judgment, and Iousoupov appealed.
On appeal, Iousoupov contended that the trial court erred in granting ASI’s motion for summary judgment because the election form was ambiguous and there was a question of fact as to whether the execution form complied with the requirements of the Insurance Code. Iousoupov argued that since the form did not comply with the requirements of the Insurance Code and ASI did not properly explain the uninsured and underinsured motorist coverage to CSC, the court should impose limits equal to the $500,00 bodily injury liability limits.
The court reviewed whether CSC knowingly elected to reject higher uninsured and underinsured coverage limits. The court affirmed the trial court’s decision that ASI’s election form was not ambiguous and the record reflects that CSC knowingly chose to elect the minimum limits of uninsured and underinsured coverage limits. Since the limits of the other driver’s liability policy were higher than the limits of CSC’s underinsured coverage, the underinsured coverage was not triggered as a result of Iousoupov’s accident.
Illinois Insurance Law: The Insurance Code requires that each insurance company providing the uninsured motorist coverage must provide applicants with a brief description of the coverage and advise them of their right to reject the coverage in excess of the limits set forth in Section 7-203 of the Illinois Vehicle Code. The burden is on the insured to reject higher uninsured motorist coverage and the insurer does not have the responsibility of making an offer of higher limits.
American Service Insur. Co. v. Iousoupov, 2014 IL App (1st) 133771.
