|
Personal Automobile |
Underinsured Motorist |
|
Ineligible Vehicle |
|
On April 21, 2000, Christina Steele was injured
while riding as a passenger on an all-terrain vehicle (ATV). The vehicle was
designed primarily for off-road use and was being used off public roads when
the accident occurred. At the time of the accident, Steele was a named insured
on her parents' automobile insurance policy issued by Insura
Property and Casualty Company. The Insura policy
provided underinsured vehicle coverage.
Steele filed a lawsuit against the driver of the
ATV, Deanna Townzen, and eventually settled with Townzen's insurer for her policy limits of $20,000. Steele
then sought underinsured vehicle coverage under the Insura
policy for the remainder of her damages.
Insura
filed a declaratory judgment petition seeking a determination that it did not
have an obligation to provide underinsured vehicle coverage to Steele because
the language of the policy excluded coverage for "vehicles or equipment
designed mainly for use off public roads while not upon public roads."
Steele argued such an exclusion
was unenforceable under the Illinois Insurance Code. The trial court entered a
judgment in Steele's favor and ordered Insura to
honor her claim. Insura appealed.
The only question on appeal was whether the
exclusion in the Insura policy was unenforceable
because it conflicted with the relevant language in the Illinois Insurance
Code.
Evaluating the plain language of the statute as
well as the intent of the legislature, the court found the underinsured
motorist statute was meant only to require insurance for underinsured vehicles
designed for and used on public roads. Thus, the exclusion in the Insura policy was not in conflict with the statute.
In reaching this decision, the court reviewed the
policy rationale for uninsured and underinsured motorist insurance coverage,
specifically to place an injured party in the position she would have been in
had the uninsured or underinsured motorist had sufficient coverage. The court
noted that in light of the above interpretation, it made no sense to interpret
the statute to mandate UM or UIM be provided to cover vehicles for which even
basic liability insurance was not required. In addition, it attached significance
to the fact the policy exclusion applied only to off-road use of an ATV.
Because the policy provided coverage when an ATV was being used on public
roads, the policy provided adequate protection from the type of harm the
underinsured motorist statute was meant to address.
The judgment of the trial court was reversed.
Insura Property and Casualty Company v. Christina
Steele--No. 5-02-0716-- Appellate Court of