The opinion of the court was delivered by: Presiding Justice Geiger delivered the opinion of the court:
IN THE APPELLATE COURT OF ILLINOIS SECOND DISTRICT
Appeal from the Circuit Court of Du Page County.
Honorable Bonnie M. Wheaton, Judge, Presiding.
The defendants-counterplaintiffs, Paul Zschau, Nancy Zschau, and Peter Zschau, appeal from the August 20, 1997, order of the circuit court of Du Page County granting summary judgment in favor of the plaintiff-counterdefendant, Western States Insurance Company (Western), on its complaint for declaratory judgment. The trial court found that Western was not obligated to pay the Zschaus underinsured motorist benefits under the provisions of their automobile insurance policy. We affirm.
The facts relevant to the Disposition of this appeal are as follows. Paul and Nancy Zschau are Illinois residents who purchased a personal automobile insurance policy issued by Western. The policy provided underinsured motorist coverage limits of $250,000 per person. The Zschaus' son, Peter Zschau, resided in his parents' home and qualified as an additional insured under the terms of the policy.
On July 12, 1994, Peter Zschau was a passenger in an automobile owned and operated by Rachel Duever. Peter sustained injuries when Duever's vehicle was involved in an accident near Hokah, Minnesota. As a result of the accident, Peter suffered a herniated disc and fracture requiring fixation and fusion; gastrointestinal tract and duodenal hematoma injuries requiring surgery; and a peptic ulcer caused by his medication. Peter's medical bills totaled over $110,000.
Duever, who was also an Illinois resident, was insured under a policy issued by Farmers Insurance Company (Farmers). Following the accident, Farmers paid Duever's full bodily injury liability limits of $250,000 to Peter Zschau.
Peter then submitted a claim to Western for underinsured motorist benefits under his parents' policy. Because Peter had already collected benefits in an amount equal to the underinsured coverage limits of his parents' policy, Western denied the claim and filed the instant action for declaratory judgment on February 27, 1997. In its complaint, Western alleged that its policy did not provide coverage because Peter's damages did not arise out of the use of an "underinsured motor vehicle" as defined by the policy. The relevant policy provision provided as follows:
" 'Underinsured motor vehicle' means a land motor vehicle or 'trailer' of any type to which a bodily injury liability bond or policy applies at the time of the accident but its limit for bodily injury liability is less than the limit of liability for this coverage." Such policy language complied with the requirements of the Illinois Insurance Code. See 215 ILCS 5/143a--2(4) (West 1996).
On May 2, 1997, the Zschaus filed an answer denying the material allegations of Western's complaint and also filed a counterclaim for declaratory judgment. In their counterclaim, the Zschaus alleged that Western was obligated to provide underinsured motorist coverage under the "out of state" coverage provision located in the liability coverage section of their policy. That provision provided as follows: "OUT OF STATE COVERAGE
If an auto accident to which this policy applies occurs in any state or province other than the one in which `your covered auto' is principally garaged, we will interpret your policy for that accident as follows.
A. If the state or province has:
1. A financial responsibility or similar law specifying limits of liability for `bodily injury' or `property damage' higher than the limit shown in the Declarations, your ...