Court Errs in Determining Underinsured Motorist Coverage
In Niemier v. Country Preferred Insurance Co., Brandon Niemier, was operating a farm tractor when it was hit by another vehicle. He sustained serious physical injuries. The Niemiers filed a claim with State Farm and sought compensation for Brandon’s injuries and for the medical expenses paid by Brandon’s parents. The Niemiers eventually settled their claims with State Farm for the “per person” liability limit of $250,000. Under the terms of the settlement, $110,000 was allocated to Brandon and $140,000 was allocated to his parents. After the settlement, Brandon Niemier, Michael Niemier, and Beth Niemier filed a declaratory judgment action and sought underinsured motorist payments under a policy of motor vehicle insurance that they had purchased from Country Preferred Insurance Company (“Country Preferred”).
West contends that the trial court erred in vacating the judgment because defendant had sufficient notice of the lawsuit and the negligence of defendant’s registered agent, attorneys, and/or insurer did not excuse defendant’s inaction.
The court reviewed the “per person” uninsured limit in the policy.
In this case, Brandon Niemier was the only person who sustained physical injuries in the accident on August 30, 2011. Under the plain language of the Country Preferred policy, Brandon’s parents’ claims for medical expenses and loss of society arose from bodily injuries to one person, Brandon, and thus fell within the $250,000 “per person” underinsured limit in the Country Preferred policy.
The purpose of underinsured coverage is to fill the gap between the benefits paid by a tortfeasor’s insurance carrier and the limit of underinsurance coverage specified in an insured’s policy. In this case, the tortfeasor’s insurer paid the maximum “per person” liability limit to the Niemiers to resolve all claims, direct and derivative, which resulted from Brandon Niemier’s injuries. Since the tortfeasor’s “per person” limit of liability is the same as the “per person” limit of underinsured coverage in the Country Preferred policy, and since the Niemiers’ claims fit within the “per person” underinsured limit, there is no gap in coverage. The trial court erred in finding that the Country Preferred policy afforded underinsured coverage up to $140,000 for Brandon and up to $110,000 for his parents.
Niemier v. Country Preferred Ins. Co., 2014 IL App (5th) 130265.
