Underinsured Motorist Coverage in Illinois
Basic information relating to making an underinsured motorist claim in Illinois.
IntroductionIn Illinois, a person is liable for an auto accident in which that person was negligent. If the liable party is insured, the financial responsibility will likely fall upon that party's insurance company. However, as a practical matter, the negligent person's financial responsibility may be limited to the amount of his or her auto liability insurance policy limits. Because Illinois law requires drivers to maintain a minimum of only $20,000.00/$40,000 in liability insurance, ($20,000 per person/$40,000 total per incident), this can create serious problems where the negligence of the insured has resulted in serious injuries to you or to a loved one. It is important to know that, where the at-fault driver has a low policy limit, you may have the ability to seek recovery from your own auto insurance provider in the form of an underinsured motorist claim.
Underinsured motorist coverage is insurance coverage provided to bridge the financial gap between the damages caused by another, insured, driver, and that driver's low policy limit. While underinsured motorist coverage is not required by Illinois law, it is advisable to request it as part of your overall insurance coverage. You must keep in mind that such obtaining such coverage will result in a higher insurance premium. Typically, your underinsured motorist policy limit will be the same as your overall liability limit. For example, if your liability limit is $100,000 per person, then your underinsured motorist coverage will be capped at $100,000.
How it worksIt is important to recognize that your insurance company is not required to pay out under your underinsured policy provisions until and unless the other driver's insurance company has "tendered" that driver's policy limit, and your company has approved your settlement for that amount. Also, your company is entitled to a credit for the full amount of the at-fault driver's tendered policy limit. For example, if you have underinsured coverage in the amount of $100,000, the other driver's liability limit is $20,000, and you have suffered $50,000 worth of damages as a result of his negligence, your insurance company is only required to pay out $30,000, so that your total recovery is $50,000 ($20,000 from at-fault driver + $30,000 underinsured coverage = $50,000). Obviously, the higher your underinsured motorist policy limits, the better your assurance that you will be properly compensated when injured due to the negligence of an uninsured driver.
Finally, as is always the case, the insurance company has no obligation to agree with the injured party's determination of the financial value of his or her damages. When your company does not agree with you as to the value of your case, the matter is resolved through the process of arbitration, a form of civil litigation that occurs outside the courts. Although arbitration can be more efficient than traditional litigation by eliminating or streamlining certain rules of procedure and evidence, it can still result in significant costs in time and money, and is best pursued with the help of an experienced injury attorney.