What Happens If A Negligent Driver Does Not Have Auto Insurance?
An insurance policy may not provide coverage simply because a driver believed their vehicle was insured.
Illinois law requires all drivers to carry a minimum amount of auto insurance. This includes liability coverage in the event the driver causes an accident that injures other people. The current minimum insurance requirements are no less than $25,000 for bodily injury or death to one person, $50,000 for bodily injury or death to two or more people in the same accident, and $20,000 for property damage.
Bodily injury or death to one person
Bodily injury or death to two or more people
Property damage
So if you are injured in a car or truck accident and you know the other driver is at fault, you might expect their insurance company to pay for your damages without question. Of course, things are not always that simple. For one thing, even if the negligent driver thought they had insurance, the insurance company might take a different view of things and disclaim coverage, which can leave you as the accident victim in a precarious spot.
Quick Take
A driver may believe they have insurance coverage while the insurer later argues that the policy does not cover the vehicle involved in an accident. A recent Illinois appellate case illustrates how an insurance agent’s failure to update a vehicle on a policy can create a serious coverage dispute.
Driver Loses Insurance Coverage Due to Agent Mistake
A recent Illinois appeals court decision, Shelter Mutual Insurance Company v. Flynn, offers a cautionary tale in this regard. This case began with a rear-end accident involving two drivers with the last names of Flynn and Herskovitz, respectively. Both cars were damaged in the accident. Herskovitz later filed a personal injury lawsuit against Flynn, alleging she was responsible for causing the accident.
Shelter Mutual Insurance Company v. Flynn
The case centered on whether an insurance policy covered the vehicle Flynn was driving when the accident occurred after an insurance agent failed to update the policy following a vehicle swap.
How the Insurance Problem Began
Flynn thought her vehicle was insured by Shelter Mutual Insurance Company. Flynn purchased the accident vehicle, a Honda Civic, in 2016. After buying the car, she texted her insurance agent and requested coverage for the Civic.
The agent obtained a one-year policy for the Civic. But after just five days, Flynn traded in the Civic for another Honda Civic. Flynn texted her agent again to inform her of the vehicle swap, but for some reason the agent never noted the change.
As a result, the policy continued to renew on the original Civic, which was no longer in Flynn’s possession.
Flynn Buys a Honda Civic
Flynn purchased the first Honda Civic in 2016 and contacted her insurance agent to request coverage for the vehicle.
Policy Issued
The insurance agent obtained a one-year policy covering the original Civic.
Vehicle Is Traded In
Only five days later, Flynn traded the original Civic for another Honda Civic.
Agent Is Notified
Flynn texted her insurance agent about the vehicle swap, but the agent failed to update the policy.
Accident Occurs
The policy continued to identify the original Civic, while Flynn was driving the replacement vehicle when the accident occurred.
Shelter Mutual Refuses to Cover the Accident
Even though Shelter Mutual continued to accept Flynn’s premium payments, it refused to cover the accident because, as far as it was concerned, she was not driving the Civic listed on the policy.
Litigation ensued between Flynn and Shelter Mutual on this issue.
The Coverage Dispute
Flynn’s position:
She believed the replacement vehicle was covered because she had notified her insurance agent about the vehicle swap.
Shelter Mutual’s position:
The policy identified the original Civic, not the vehicle Flynn was driving at the time of the accident.
What the Illinois Courts Decided
To make a long story short, an Illinois circuit court judge ultimately held that Shelter Mutual was in the right. The insurance company had no duty to indemnify or defend Flynn against Herskovitz’s personal injury claim because she was not driving an insured vehicle at the time of the accident.
The Illinois First District Appellate Court agreed, noting that even though it was the agent’s mistake, Shelter Mutual had no way of knowing that Flynn had traded in her vehicle until after she filed a claim following the accident with Herskovitz.
The Key Issue
The appellate court agreed that the insurer was not required to defend or indemnify Flynn because the vehicle she was driving was not the vehicle identified as insured under the policy.
As such, the insurer was not responsible for the accident.
What This Means for Illinois Car Accident Victims
The Shelter Mutual Insurance Company v. Flynn decision illustrates why determining whether an at-fault driver actually has applicable insurance coverage can sometimes be more complicated than simply obtaining the name of the driver’s insurance company.
Policy Details
The vehicle identified on the insurance policy can matter when determining whether coverage applies.
Coverage Disputes
An insurer may dispute coverage even when the driver believed that the vehicle was insured.
Your Own Policy
Your own uninsured or underinsured motorist coverage may provide another potential source of compensation in some circumstances.
Uninsured and Underinsured Motorist Coverage
Even in cases where a negligent defendant lacks insurance to cover an accident they caused, the victim may still be able to seek compensation under their own policy if they have uninsured/underinsured (UM/UIM) motorist coverage.
UM/UIM Coverage
Uninsured motorist coverage can potentially apply when the at-fault driver does not have applicable insurance. Underinsured motorist coverage can potentially apply when the at-fault driver has insurance, but the available liability coverage is insufficient to fully compensate an injured person, subject to the terms and conditions of the applicable policy.
Common Questions About Illinois Auto Insurance Coverage
Why This Matters
Insurance coverage can become a major issue after a serious Illinois car accident. The identity of the insurer is only part of the question. The policy language, insured vehicle, applicable coverage limits, and any UM/UIM coverage may all need to be examined.
Contact Illinois Car Accident Attorney Baku N. Patel Today
Even in cases where a negligent defendant lacks insurance to cover an accident they caused, the victim may still be able to seek compensation under their own policy if they have uninsured/underinsured (UM/UIM) motorist coverage. A skilled Champaign auto accident lawyer can further advise you of your rights in this area. So if you have been in a car accident, contact Patel Law, PC, today to schedule a free case evaluation.
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Speak With Patel Law, PC
If you were injured in a car accident and there is a dispute over insurance coverage, our team can review the circumstances and discuss your legal options.
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