Alshwaiyat v. American Service Insurance Company
986 N.E.2d 182
Ill. App. Ct.2013Background
- Plaintiff Alshwaiyat sought declaratory judgment that ASI’s Mojo policy provided $500,000 in UIM coverage.
- Original Mojo policy (June 8, 2007–Jan 1, 2008) had $300,000 CSL and UM/UIM limits of $20k/$40k; Mojo rejected higher UM/UIM.
- Endorsement around Oct 1, 2007 increased liability limits to $500,000 CSL without altering UM limits.
- Renewal policy (Jan 1, 2008–Jan 1, 2009) mirrored liability and UM limits of the original policy; Mojo did not reaffirm higher UM/UIM coverage at renewal.
- Plaintiff argued section 143a-2 required matching UM/UIM to $500,000 in renewal; ASI argued no such requirement as there was no new policy under section 143a-2(1) and the renewal fell under the section 143a-2(2) exception.
- Circuit court granted summary judgment for plaintiff; appellate panel reversed, deciding 143a-2(2) exempted the renewal from matching UM/UIM coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does 143a-2 require matching UM/UIM coverage on a renewal policy? | Alshwaiyat: renewal triggers matching UM/UIM to liability limits. | ASI: renewal does not require such matching due to 143a-2(2) exception. | No; 143a-2(1) requires matching only if not exempt by 143a-2(2). |
| Is the Oct 2007 endorsement of the original policy a separate policy for 143a-2 purposes? | Endorsement creates a new policy requiring new election. | Endorsement is an amendment, not a new policy; 143a-2(1) not triggered. | Endorsement did not implicate 143a-2(1). |
| Is the Jan 2008 renewal a renewal/reinstatement/reissuance/substitution under 143a-2(2)? | Renewal should be treated as a new policy to require equal UM/UIM. | Renewal is a renewal of the same policy; exempt under 143a-2(2). | Renewal qualifies for the 143a-2(2) exemption; no need to provide higher UM/UIM in renewal. |
| Does Nicholson control the outcome given pre/post-2004 text of 143a-2? | Nicholson mandates reoffering equal UM upon material changes. | Post-2004 law changes replace Nicholson’s approach; Nicholson is not controlling. | Nicholson not controlling; current statute language controls; ASI not obliged to match UM/UIM in renewal. |
Key Cases Cited
- Nicholson v. State Farm Mut. Auto. Ins. Co., 409 Ill. App. 3d 282 (2010) (ambiguous pre-2004 language; not controlling after amendments)
- Phoenix Ins. Co. v. Rosen, 242 Ill. 2d 48 (2011) ( UM/UIM matching with liability limits; public policy aim)
- Pajic v. Old Republic Insurance Co., 394 Ill. App. 3d 1040 (2009) (statutory interpretation of 143a-2(1)-(2) post-2004 changes)
- Chatlas v. Allstate Insurance Co., 383 Ill. App. 3d 565 (2008) (definition and treatment of renewal/substitution under 143a-2(2))
- Makela v. State Farm Mut. Auto. Ins. Co., 147 Ill. App. 3d 38 (1986) (endorsements as amendments to policies)
- Burnett v. Safeco Insurance Co. of Illinois, 227 Ill. App. 3d 167 (1992) (definition of amendment/replacement in policy terms)
- Ullman v. Wolverine Insurance Co., 48 Ill. 2d 1 (1970) (purpose of minimum liability and UM requirements)