Kreisman Law Offices Professional Corporation
Ana Reyes was the owner of a motor vehicle and was the sole named insured. She purchased auto insurance from American Access Casualty Co., and the policy specifically said there would be no liability coverage for any accident in which she was operating a motor vehicle.
On Oct. 30, 2007, Reyes allegedly drove the Chrysler sedan she owned and hit two pedestrians, killing a 4-year-old boy and injuring his mother.
The Jasso family, who were the injured mother and fatally injured child, had uninsured motorist coverage with State Farm Insurance Co. The question for the Illinois Supreme Court in this case was the dispute between American Access and State Farm as to whether public policy as established under §7-317(b)(2) of the Illinois Vehicle Code serves to block insurance companies from excluding coverage for a policy’s sole named insured. With Justice Thomas Kilbride dissenting, the Illinois Supreme Court concluded “an automobile liability insurance policy cannot exclude the sole named insured since such an exclusion conflicts with the plain language of Section 7-317(b)(2) and, therefore, violates public policy.”
Justice Kilbride spotted a problem. He said it was a “disturbing consequence of the majority’s construction” of this state law, which affects “elderly drivers and those suffering from disabilities that are inconsistent with safe driving…” Clearly, what the justice was getting at was that some motor vehicle owners are not drivers. They may not even have a driver’s license and rely on others for their transportation, yet are the sole insured.
Justice Kilbride also stated that “under the majority’s view, the disabled or elderly vehicle owner who happened to be a sole named insured would have to be covered as a potential driver of the vehicle in an owner’s policy, despite admittedly possessing neither the ability nor the intent to drive.” Because Justice Kilbride was in the minority and unable to persuade his colleagues, he commented that the legislature should examine the statute to provide for the elderly and disabled vehicle owners and provide them with relief.
Under §7-601(a) of the Illinois Safety and Family Financial Responsibility Law, part of the Illinois Vehicle Code requires liability insurance coverage for all motor vehicles designed to be used on a public highway. At the same time, §7-317(b)(2) of the code mandates that a liability policy “shall insure the person named therein and any other person using or responsible for the use of such motor vehicle or vehicles with the express or implied permission of the insured.” The purpose of the state’s mandatory liability insurance requirement is to protect the public. The issue here was whether an automobile liability policy can exclude the only named insured and owner of the vehicle without violating public policy.
The majority said that since the statute exists for the protection of the public, it cannot be overridden through private contractual terms.
The court also stated that it uses its power to declare a contractual provision void as against public policy very rarely, but did so here because the provision clearly was contrary to what the constitution, the statute or the decision of the court had declared to be public policy and the provision was manifestly injurious to the public welfare.
The court stated, along with State Farm, that under the plain language of the code, coverage was required for Reyes. Accordingly, under the authority and the plain and clear language of §7-317(b)(2), Reyes cannot be excluded from coverage under the policy. The court also stated that as a general matter, named driver exclusions are permitted in Illinois. None of the authority that American Access brought up here addressed the question whether the named insured and owner can be excluded from coverage.
The bottom line is that the Supreme Court’s interpretation of the statute is that the state’s interest is in protecting the driving public and far outweighs any insured’s desire to exclude him/herself from coverage in order to obtain a lower premium. For those reasons, the court held that an automobile liability insurance policy cannot exclude the sole named insured since such an exclusion is in conflict with the plain language of §7-317(b)(2) and therefore violates public policy.
American Access Casualty Co. v. Reyes, 2013 IL 115601 (December 16, 2013).
Kreisman Law Offices has been handling automobile injury cases, bus accident injury cases and truck accident injury cases for individuals and families who have been harmed, injured or died as a result of the carelessness or negligence of another for more than 38 years in and around Chicago, Cook County and its surrounding areas, including Homewood, Harwood Heights, Hanover Park, Inverness, Chicago (Jackson Park, Hyde Park, Rogers Park), Lincolnwood, Hillside, Elmhurst and Robbins, Ill.
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