New Statutory Limits Will Allow More Uninsured Motorist Arbitration Awards to Become Binding.

Every day, Illinois drivers are injured in motor vehicle accidents with hit-and-run drivers or drivers who are uninsured or underinsured. In 2012, over 13% of Illinois drivers were uninsured, and the increasing number of uninsured and underinsured drivers nationwide only underscores the importance of having uninsured motorist coverage for the rest of us. In Illinois, it is the right of every policyholder who carries Uninsured Motorist coverage, or “UM” coverage, to have his or her injury claim seeking UM coverage heard at arbitration, to decide how much compensation or “damages” will be paid.

An UM arbitration is a legal proceeding held before a panel of arbitrators. The arbitration hearing is set up much like a trial, where parties represented by lawyers call witnesses and present evidence to the arbitration panel. After the hearing, the arbitrators render a decision, referred to as an arbitration “award.” The decision of the arbitrators determines whether the injured person has a right to receive any damages under the insurance policy and how much.

Too often, however, insurance companies disagree with an arbitration award and seek to reject the award by filing a lawsuit against their insured, the injured party. Insurance companies frequently reject high arbitration awards as a delay tactic, preventing an injured person from receiving benefits, including money for medical expenses and pain and suffering.

Illinois recently amended the Illinois Insurance Code, raising award limits, making it more difficult for insurance companies to needlessly reject the decisions of arbitrators in uninsured and underinsured motorist claims (commonly referred to as “UM” and “UIM claims”). The recent changes will be helpful to anyone who has been injured in a car accident by a hit-and-run driver or an uninsured or underinsured driver.

Under Section 143a(1) of the Illinois Insurance Code, the decisions of arbitrators will be now become binding in awards up to $75,000 for single bodily injury claims, and $150,000 in multiple claims or wrongful death claims:

Any decision made by the arbitrators shall be binding for the amount of damages not exceeding $75,000 $50,000 for bodily injury to or death of any one person, $150,000 $100,000 for bodily injury to or death of 2 or more persons in any one motor vehicle accident, or the corresponding policy limits for bodily injury or death, whichever is less. 215 ILCS 5/143a(1).

By increasing the applicable thresholds for arbitration awards, the Illinois General Assembly has made it more difficult for insurance companies to simply reject an injured person’s award. How does this work? Imagine, for example, that an injured person (“claimant”) suffers severe injuries in a car accident caused by a hit-and-run driver or uninsured motorist. The claimant files an uninsured motorist claim with her insurance carrier, and under the terms of the policy, the claim goes before an arbitration panel. The arbitrators return an award for the plaintiff for $60,000. Under the old law, the insurance company could simply file a lawsuit, rejecting the award because this award exceeded $50,000, the previous limit. Under current law, with raised limits, the award would fall well below the $75,000 threshold; therefore, the $60,000 arbitration award would become final.

By limiting the rejection of arbitration awards by insurance companies, more injured persons with uninsured or underinsured motorist claims will be able to resolve their claims at arbitration quickly and efficiently, avoiding the unnecessary expense of having their case brought to court by the insurance company.

Uninsured and underinsured motorist claims can be extremely complicated. Having an experienced attorney with a keen understanding of the Illinois uninsured motorist arbitration process can help persons injured in car accidents get the best possible result. If you or someone you know has been involved in a car accident with an uninsured/underinsured driver or a hit-and-run driver, contact the Illinois motor vehicle accident attorneys at John J. Malm & Associates.