U.S. Court of Appeals Affirms Underinsurance Motorist Coverage; Wehrle v. Cincinnati Ins. Co.

Heike Wehrle and Robert Wehrle were severely injured in an auto crash with a drunk driver who had minimal insurance coverage.  The Wehrles had an underinsured motorist insurance policy with Cincinnati Insurance Co. that paid the difference between their $1 million coverage limit and the $200,000 that they received from the at-fault driver. 

The Wehrles sued Cincinnati claiming that they were entitled to the full $1 million of underinsurance rather than $800,000, which was the difference between the $1 million provided by Cincinnati and the $200,000 provided by the insurance company for the tortfeasor drunk driver.

The Wehrles were driving their sport-utility vehicle in Kane County, Ill., in December 2010.  They were hit by a drunk driver, Eric Barth. The Wehrles were severely injured and their medical expenses and damages far exceeded the policy limits of either Barth’s insurance or their own underinsurance policy. 

Because of the size of their injury claims, the Wehrles made an underinsurance claim with Cincinnati. Cincinnati paid out $800,000 of the $1 million underinsurance policy.  The contract of insurance included a provision that reduces its $1 million maximum payout “by all sums paid by anyone who is legally responsible.” Because the Wehrles received $200,000 from the drunk driver’s insurer, Cincinnati paid only $800,000 under its terms of its policy. 

The Wehrles argued that the payment from the drunk driver’s insurance policy of $100,000 to each of the Wehrles was just to reduce their respective injury claims. The Wehrles maintained that the $1 million cap on recoveries should be implemented only after reductions were made.

The district court judge granted Cincinnati’s motion for summary judgment and denied the Wehrles’ motion for summary judgment and entered a final judgment for Cincinnati. The Wehrles appealed. The U.S. Court of Appeals, applying Illinois law, stated that “an insurance policy is a contract, and the general rules governing the interpretation of other types of contracts also govern the interpretation of insurance policies.”  Hobbs v. Hartford Ins. Co. of the Midwest, 823 N.E.2d 561, 564 (Ill. 2005).

The Wehrles argued that the language of the Cincinnati Insurance policy was vague and ambiguous. The court of appeals disagreed. Under Illinois law, as to underinsured motor vehicle insurance, the statute states:  “The limits of liability for an insurer providing underinsured motorist coverage, shall be the limits of such coverage, less those amounts actually recovered under the applicable bodily injury insurance policy . . . maintained on the underinsured motor vehicle.”  215 ILCS 5/143(a)-2(4) (2004).  The appellate court also stated that the reduction from the Cincinnati $1 million policy by the $200,000 recovered by the Wehrles from the tortfeasor driver, was a straightforward application of the statutory language.

The court of appeals found that the Wehrles’ insurance policy language was clear and unambiguous and supported Cincinnati’s interpretation as well as applying the Illinois underinsured motorist coverage law.  The decision of the district court was affirmed.

Robert Wehrle and Heike Wehrle v. Cincinnati Ins. Co., 7th Cir. 12-30552 (July 8, 2013).

Kreisman Law Offices has been handling automobile and truck accidents for individuals and families who have been harmed, injured or died as a result of the carelessness or negligence of another for more than 37 years in and around Chicago, Cook County and its surrounding areas, including Wheeling, Wheaton, Woodridge, Woodstock, Plainfield, Palos Heights, Oakbrook, Naperville, Mundelein, Midlothian, Long Grove, Chicago (Wrigleyville), Chicago (West Town) and University Park, Ill.

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