Court Upholds Anti-stacking Terms of Underinsured Auto Coverage

By Don R. Sampen, published, Chicago Daily Law Bulletin, February 20, 2024

The 1st District Appellate Court recently held that an insured under three automobile policies issued by the same insurer was not entitled to stack underinsured motorist benefits for the insured’s bodily injury.

The case is Miecinski v. State Farm Mutual Automobile Insurance Co., 2024 IL App (1st) 230193 (Jan. 17). The insured, Kathryn Miecinski, was represented by Gordon Law Offices Ltd. of Chicago. Taylor Miller LLC of Chicago represented the insurer, State Farm.

Miecinski, who was 17 at the time, was struck by a vehicle while riding as a passenger on a motorcycle. After settling with the driver of the at-fault vehicle for $25,000, she made a claim for underinsured motorist coverage under three State Farm policies issued to her family members.

Each of the three policies covered a different automobile owned by Miecinski’s family members, with each providing $500,000 in UIM coverage. State Farm acknowledged that Miecinski was an insured under each policy, but took the position that the most she could recover was $500,000 minus her $25,000 settlement amount.

In taking such a position, State Farm relied on an “other coverage” provision in each policy. It stated that if UIM coverage existed in two or more policies issued by State Farm to her or resident relatives, her maximum UIM benefit would be the single highest applicable limit in any one policy.

Despite such language, Miecinski contended that an ambiguity existed between the policies’ declarations pages and the “other coverage” provisions, and that State Farm knowingly provided illusory coverage under two of the three policies.

She thus brought the instant declaratory action against State Farm, in which the trial court granted summary judgment to State Farm. Miencinski took this appeal.

Analysis

In an opinion by Justice Jesse G. Reyes, the 1st District affirmed. He initially observed that anti-stacking provisions are expressly allowed under the Illinois Insurance Code, 215 ILCS 5/143a-2(5), and are generally to be given effect.

He nonetheless cited cases where ambiguities were found, resulting in stacking being allowed. In one case, for example, Cherry v. Elephant Insurance Co., 2018 IL App (5th) 170072, the anti-stacking provision appeared to prohibit recovering multiple “coverages” rather than “limits.” In another, Johnson v. Davis, 377 Ill. App. 3d 602 (2007), the declarations page for a single policy listed the UIM limit four separate times (for four vehicles), giving rise to purported uncertainty over what was intended.

Reyes, however, distinguished these cases, noting that State Farm had issued three different policies, with an “other insurance” provision making clear that the maximum benefit would be the highest applicable limit provided by any one policy.

He acknowledged that the policies’ declarations pages, read in isolation, might give rise to an ambiguity, but when those pages were read “as a whole” with the “other coverage” section and the rest of the policy, no ambiguity existed.

As for Miecinski’s illusory coverage argument, Reyes found there were numerous circumstances where the UIM coverage for one policy could apply but not the others, for example, for an accident involving nonfamily members. As a result, the policies therefore did not provide illusory UIM coverage.

The court therefore affirmed summary judgment in favor of State Farm.

Key Point

Unambiguous policy provisions limiting an insured’s UIM benefits to the higher applicable limit of two or more applicable policies are permitted and enforceable in Illinois.