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11/18/87 Edward R. Krska, v. Allstate Insurance Company

November 18, 1987

EDWARD R. KRSKA, PLAINTIFF-APPELLANT

v.

ALLSTATE INSURANCE COMPANY, DEFENDANT-APPELLEE



APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

515 N.E.2d 1304, 162 Ill. App. 3d 549, 114 Ill. Dec. 33 1987.IL.1709

Appeal from the Circuit Court of Du Page County; the Hon. Anthony M. Peccarelli, Judge, presiding.

APPELLATE Judges:

PRESIDING JUSTICE LINDBERG delivered the opinion of the court. NASH and REINHARD, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE LINDBERG

The plaintiff, Edward R. Krska, appeals from an order of the circuit court of Du Page County granting a motion for summary judgment by the defendant, Allstate Insurance Company. The circuit court found as a matter of law that the defendant's offer of additional underinsured motorist coverage complied with section 143a-2 of the Illinois Insurance Code (Code) (Ill. Rev. Stat. 1983, ch. 73, par. 755a-2). On appeal, the plaintiff contends that the defendant's offer failed to comply with the statutory requirements of section 143a-2 of the Code in that (1) the limits of the optional coverage were not set forth in specific terms, (2) the offer failed to communicate the availability of underinsured motorist coverage in an intelligent, meaningful way, and (3) the offer failed to advise the insured that the optional coverage was available for a relatively modest premium increase.

On December 18, 1984, the plaintiff was injured when his vehicle collided with an automobile operated by Pedro E. DeLeon (DeLeon). At the time of the accident, DeLeon was insured under a State Farm Mutual Insurance Company automobile policy which had bodily injury liability limits of $500,000 per person. The plaintiff obtained a judgment against DeLeon for damages in the sum of $500,000. The plaintiff recovered $50,000 from DeLeon, which was the maximum allowable under the bodily injury liability limit of DeLeon's automobile insurance policy. At the time of the accident, the plaintiff was insured under the defendant's automobile policy which provided uninsured and underinsured motorist coverage with limits of $50,000 per person and $100,000 per occurrence and bodily injury liability coverage with a limit of $300,000 per person and $300,000 per occurrence.

On November 2, 1983, over a year prior to the plaintiff's accident, the defendant mailed the plaintiff information concerning the renewal of his policy. That information included a "coverage update" offer and a premium declarations page. The coverage update offer explained that uninsured and underinsured motorist coverage had been combined into a single new coverage and extended policyholders an opportunity to increase their limit on the new uninsured/underinsured motorist coverage up to their current bodily injury liability limit. Additionally, the offer stated that the cost of the new coverage was indicated on the policyholder's premium declarations page. The offer also instructed the policyholder on how to accept the new coverage.

On November 30, 1983, the plaintiff renewed his policy with the defendant yet did not indicate that he wished to increase the limits of his present coverage. On May 30, 1984, the plaintiff elected to increase his uninsured/underinsured motorist coverage limit to $50,000 per person and $100,000 per occurrence.

On December 19, 1985, the plaintiff filed a complaint in the circuit court of Du Page County which alleged, inter alia, that the defendant failed to offer him a proper opportunity to purchase uninsured/underinsured motorist coverage in an amount up to his policy's bodily injury liability limit as required by section 143a-2 of the Code (Ill. Rev. Stat. 1983, ch. 73, par. 755a-2). The plaintiff requested that the circuit court reform his policy to include uninsured/underinsured motorist coverage in an amount equal to his bodily injury liability limit ($300,000). The proposed policy reformation would enable the plaintiff to recover $250,000 from the defendant because, under section 143a-2(3) of the Code (Ill. Rev. Stat. 1983, ch. 73, par. 755a-2(3)), DeLeon's bodily injury liability limit ($50,000) was less than the plaintiff's underinsured motorist coverage ($300,000).

The defendant filed a motion for partial summary judgment on the part of the plaintiff's complaint which sought relief under section 143a-2 of the Code (Ill. Rev. Stat. 1983, ch. 73, par. 755a-2). In granting the defendant's motion, the circuit court found as a matter of law that the defendant's offer of underinsured motorist coverage satisfied the requirements of section 143a-2 of the Code and the four-part test for sufficiency of an offer for optional coverage as set forth in Cloninger v. National General Insurance Co. (1985), 109 Ill. 2d 419, 488 N.E.2d 548. The plaintiff appeals from the circuit court's order granting partial summary judgment.

The sole issue raised in this appeal is whether the defendant made a proper offer of additional underinsured motorist coverage as required by section 143a-2 of the Code (Ill. Rev. Stat. 1983, ch. 73, par. 755a-2). Since no genuine issue of material fact has been raised by the parties, our function on review is to determine whether the circuit court's order granting partial summary judgment was correctly entered as a matter of law. See Burnidge Brothers Almora Heights, Inc. v. Wiese (1986), 142 Ill. App. 3d 486, 490, 491 N.E.2d 841.

Section 143a-2(1) requires insurers to offer insureds uninsured motorist coverage in an amount equal to the insured's bodily injury liability limit. (Ill. Rev. Stat. 1983, ch. 73, par. 755a-2(1).) Section 143a-2(5) requires that any policy which provides uninsured motorist coverage in excess of the statutory minimum ($15,000 per person, $30,000 per occurrence) must automatically provide underinsured motorist coverage in the same amount. (Ill. Rev. Stat. 1983, ch. 73, par. 755a-2(5).) Therefore, in reading sections 143a-2(1) and 143a-2(5) together, it is clear that the defendant was required to offer underinsured motorist coverage in an amount equal to the plaintiff's bodily injury liability limit.

In Cloninger v. National General Insurance Co. (1985), 109 Ill. 2d 419, 488 N.E.2d 548, our supreme court set forth a four-part test to determine the sufficiency of an offer for optional coverage as required by section 143a-2 of the Code (Ill. Rev. Stat. 1983, ch. 73, par. 755a-2). To satisfy the requirements of section 143a-2, an offer must (1) notify the insured in a commercially reasonable manner if the offer is not made in face-to-face negotiations; (2) specify the limits of the optional coverage without using general terms; (3) intelligibly advise the insured of the nature of the offer; and (4) advise the insured that the ...


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