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Illinois Appellate Court: UIM Coverage Must Extend to Pedestrians and Bicyclists

Helmet and bike lying on the road on a pedestrian crossing, after accident

The Illinois Appellate Court has ruled that UIM coverage must extend to pedestrians and bicyclists, even if the insurance policy explicitly states otherwise. As such, insurers in Illinois are required to pay benefits to insured victims regardless of whether they were occupants of a motor vehicle, or they were walking or riding a bicycle when the injury accident occurred. 

In an opinion that was released on September 30, 2022, the panel stated that “The terms of an insurance policy that conflict with a statute are void and unenforceable.” According to the majority opinion, “Similarly, insurance policy terms cannot circumvent the underlying purpose of a statute in force at the time the policy is issued.

The Court’s ruling reverses a previous summary judgment that was issued by the Chicago Circuit Court in favor of the insurance company

How Did the Court Determine Whether UIM Coverage Must Extend to Pedestrians and Bicyclists?

Two appeals filed by the insurance company’s policyholders were considered by the Illinois Appellate Court’s 1st Division when determining whether UIM coverage must extend to pedestrians and bicyclists

The first case involved Carmen Galarza, who was injured in a 2018 hit-and-run accident while walking out of a store. Galarza and her pedestrian accident lawyer filed a lawsuit against Direct Auto Insurance Company after the insurer denied her UIM claim on the basis that the victim was not occupying an insured motor vehicle at the time of the accident. Since the trial court had not yet issued a final ruling, the Illinois Appellate Court determined that it had no jurisdiction to consider the plaintiff’s appeal. 

The second case the Court considered when determining whether UIM coverage must extend to pedestrians and bicyclists also involved Direct Auto Insurance Company. On September 24, 2020, Cristopher Guiracocha, 14, was riding his bicycle when he was allegedly struck by a motor vehicle in a hit-and-run accident. Cristopher’s father, Fredy Guiracocha, filed a claim against his uninsured motorist policy on behalf of his son. Direct Auto Insurance Company quickly denied the claim, once again on the basis that Cristopher was riding his bicycle when the accident happened, and not an occupant of an insured automobile. 

In both cases, the language in the company’s policies explicitly stated that uninsured motorist coverage was only available to insured victims who suffered injuries while they were occupants of an insured motor vehicle. 

Direct Auto Insurance Company argued that the Illinois Insurance Code did not require that UIM coverage must extend to pedestrians and bicyclists, and therefore, no coverage was owed to Guiracocha. 

In January 2022, Cook County Circuit Court Judge Sophia H. Hall agreed with the insurance company, ruling that the insurer did not owe UIM coverage to the victim. The Court granted a summary judgement in favor of Direct Auto. The victim appealed.

The Illinois Insurance Code Prohibits Insurers from Denying Coverage

Under section143a of the Illinois Insurance Code, insurance companies are prohibited from denying coverage to people who are covered by a liability policy. The language contained in Direct Auto Insurance Company’s policies directly conflicts with the statute, according to the panel. It specifically denies coverage for pedestrian and bicyclist injuries caused by uninsured motor vehicles and hit-and-run accidents.  

According to Galarza’s uninsured motorist lawyer, Ankin Law’s own Matthew C. Friedman, “State Farm and every other decent insurance company covers uninsured motorist claims made by their insureds under similar circumstances. Direct Auto is a substandard carrier who is always looking for a way to avoid coverage.

Car accident attorneys in Chicago and throughout Illinois continuously handle personal injury cases in which insurance companies like Direct Auto unfairly deny valid claims. Since UIM claims involving hit-and-run accidents are prone to fraud, they are some of the most common types of injury claims to be denied by insurers. Denying that UIM coverage must extend to pedestrians and bicyclists is just one of the way substandard insurance companies try to get out of paying. Other tactics insurers use include:

  • Placing blame on injured victims, like pedestrians and bicyclists
  • Minimizing injuries
  • Arguing that the victim is not “an insured person” under the policy
  • Twisting policy language to benefit the insurance company

What Does UIM Cover in Illinois? 

Uninsured motorist insurance is designed to place the policyholder and the insured people in substantial the same position that person would be in if they suffered injuries or death in an accident where the at-fault party carried the minimum liability insurance coverage required in the state. UIM policies in Illinois must provide coverage that is at least equal to the coverages required under the Illinois Insurance Code. If the policy language departs from the coverage required in the state, any lesser terms are not enforceable, even if they are clearly spelled out in the policy. In most cases, uninsured motorist insurance covers the following, up to the policy limits.

Motor Vehicle Accident Injuries Caused by Uninsured Drivers

Uninsured motorist coverage pays for injuries suffered by occupants of motor vehicles who are injured by drivers who do not have liability insurance. The policy will provide coverage for economic losses, like medical bills and lost wages. It also covers non-economic damages like pain and suffering. Minimum limits for bodily injury and deaths in uninsured motorist policies in Illinois are $25,000 per victim, and $50,000 per accident. 

Hit-and-Run Accident Injuries

If the at-fault driver that causes a hit-and-run accident cannot be located, it is perceived that the victim was injured by a driver without insurance. As such, the victim can file a claim against his or her own uninsured motorist policy to recover compensation for medical bills and other qualifying losses. Additionally, family members and other occupants in the person’s vehicle can file personal injury claims to recover compensation through the insurance. 

Motor Vehicle vs Bicyclist or Pedestrian Accident Injuries

Per the Illinois Appellate Court’s recent ruling, UIM coverage must extend to pedestrians and bicyclists when they are injured by an uninsured driver or a motorist who leave the scene of the accident. Even if the insurance policy terms explicitly state otherwise, the language is not enforceable if it contradicts the statute.

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