Statutes of Limitations and Public Policy
Defendant Whitehead, a resident of Illinois, was involved in an accident with an uninsured motorist in the state of Wisconsin. She was covered by her insurance company, Plaintiff Country Preferred Insurance Co. Her policy stated that disputes with uninsured motorists were to be decided by arbitration and that there must be a written demand for the arbitration within two years from date of the accident. Whitehead notified Country Preferred of her accident shortly after it occurred, but waited two years before making a demand for arbitration.
The issue was whether Whitehead was barred from pursuing an uninsured motorist claim because she did not file a request for arbitration within her insurance policy’s two-year policy limit although Wisconsin, the state in which the accident occurred, had a three year statute of limitations for personal injury causes of action. Instead of being able to wait three years under the Wisconsin statute of limitations, she had to file an arbitration claim within two years, which she would not have had to do if the tortfeasor had insurance. Illinois public policy is violated when it places an injured party in a substantially different position than if the tortfeasor had carried insurance.
The Court held that the insurance policy violated public policy because it shortened the time limit the insured would have had to bring the personal injury suit and put her in a substantially different position had the other driver been insured. The Court rejected the contention that because it had upheld a two year statute of limitations in Illinois, it should uphold the two year statute of limitations in the policy. Since Wisconsin provides for a three year statute of limitations for personal injury actions, the insurer could not shorten that time period for an uninsured motorist claim.
Country Preferred Ins. Co. v Whitehead, 2011 IL App (3d) 110096, 955 N.E.2d 689 Ill.App. 3 Dist., 2011.
