Mere notice of a claim may not be sufficient to avoid a limitations bar
When an insurance policy’s statute of limitations provision is written in clear and unambiguous language and requires a written demand or request for arbitration, mere notice of a claim is not sufficient to avoid the limitations bar.
A policyholder sent a letter to her insurer, State Farm, stating her “intention to pursue an Uninsured/Underinsured Motorist Claim” six days before the two-year statute of limitations period expired. The insurer, State Farm, denied the claim and the policyholder sought a declaration to compel the insurer to arbitrate the policyholder’s claim.
An express provision of the policy stated that “any arbitration or suit” would be barred “unless commenced within two years after the date of the accident.” The policy also required the policyholder to name an arbitrator in the request for arbitration. The policyholder conceded that her letter was not perfect but that her implied intent to commence arbitration was sufficient. The insurer countered that the policyholder’s letter could not reasonably be read as “commencing” arbitration within two years of the accident.
The dispositive question turned on whether the policyholder had commenced suit, action or arbitration within two years of the accident as required under the policy.
The answer lied in the clear and unambiguous language of the limitations provision declaring what must be done to comply with that provision. The Court concluded that the policyholder’s letter failed to expressly request arbitration and did not select an arbitrator on the policyholder’s behalf as required by the limitations provision of the insurance policy.
Rein v. State Farm Mutual Automobile Ins. Co., 407 Ill. App. 3d 969, 945 N.E.2d 94 Ill.App. 1 Dist.,2011.
