Ill. Supreme Court Rules Against Stacking Underinsured Motorist Coverage

January 25, 2005

Illinois’ top court has ruled that the stacking of underinsured-motorist coverage (UIM) was clearly prohibited by two companies’ insurance policies at issue in the case it decided. The Supreme Court’s ruling came in the consolidated cases of Hobbs v. Hartford Insurance Co. of the Midwest and Anheuser v. Prudential Property and Casualty Insurance Co..

The Illinois Supreme Court consolidated Hobbs and Anheuser for review, due to the similarity of issues. The accident in the Hobbs case occurred in June 2000 and the Anheuser case occurred in September 1999.

In both cases, the plaintiffs contended at trial that the language of their respective policies was ambiguous as to the limits of UIM coverage, thus permitting stacking, the Property Casualty Insurers Association of America said in a statement. In both cases, the trial court agreed with this argument, and both verdicts were affirmed by the appellate court. The defendant insurers appealed to the Illinois Supreme Court. PCI, along with Farmers Automobile Insurance Association and Pekin Insurance Co. filed an amicus brief, urging the court to uphold the validity of anti-stacking provisions.

The Illinois Supreme Court reversed the decision of the lower courts, stating that when the respective policies were construed as a whole, the unambiguous language of the anti-stacking provisions clearly prohibited stacking of UIM coverage. The court also indicated that anti-stacking clauses do not contravene public policy, and that the Illinois Insurance Code expressly authorizes the use of anti-stacking provisions in motor vehicle insurance policies.