Illinois Supreme Court Prohibits UIM Stacking If Policy Language Unambiguous
CHICAGO – On January 21, 2005 the Supreme Court of Illinois issued its decision in the consolidated cases of Hobbs v. Hartford Ins. Co. of the Midwest and Anheuser v. Prudential Prop. and Cas. Ins. Co., declaring the unambiguous language of antistacking clauses in insurance policies prohibited the stacking of underinsured-motorist coverage.
"This decision is a major victory for insurers providing automobile coverage in Illinois" said Robert J. Hurns, legislative database manager and counsel for the Property Casualty Insurers Association of America (PCI), which filed an amicus brief in the case. "The High Court has recognized that where the language of a policy is clear and unambiguous, its provisions should be enforced without any reinterpretation. Clearly, the policies at issue prohibited the stacking of underinsured-motorist coverage."
The Illinois Supreme Court consolidated Hobbs and Anheuser for review, due to the similarity of issues. The accident in the Hobbs case occurred in June 2000 and the Anheuser case occurred in September 1999.
In both cases, the plaintiffs contended at trial that the language of their respective policies was ambiguous as to the limits of UIM coverage, thus permitting stacking. In both cases, the trial court agreed with this argument, and both verdicts were affirmed by the appellate court. The defendant insurers appealed to the Illinois Supreme Court. PCI, along with Farmers Automobile Insurance Association and Pekin Insurance Company filed an amicus brief, urging the court to uphold the validity of antistacking provisions.
The Illinois Supreme Court reversed the decision of the lower courts, stating that when the respective policies were construed as a whole, the unambiguous language of the antistacking provisions clearly prohibited stacking of UIM coverage. The Court also indicated that antistacking clauses do not contravene public policy, and that the Illinois Insurance Code expressly authorizes the use of antistacking provisions in motor vehicle insurance policies.
"Hopefully this decision will lay this issue to rest in Illinois, and insurers can go forward knowing a contract is a contract" said Hurns.
PCI is composed of more than 1,000 member companies, representing the broadest cross-section of insurers of any national trade association. PCI members write $173.6 billion in annual premium, 39.1 percent of the nation's property/casualty insurance. Member companies write 49.1 percent of the U.S. automobile insurance market, 37.8 percent of the homeowners market, 31.8 percent of the commercial property and liability market, and 38.5 percent of the private workers compensation market.
Source: PCI