Car Insurance Reduced When Driven By Non-Family Member
The issue addressed in this case has been addressed, and the outcome reversed, by the Illinois Legislature in Public Act 95-395, with an effective date of January 1, 2008. The Act, which created new section 143.13a of the Illinois Insurance Code (215 ILCS 5/143.13a), now mandates that “any policy of private passenger automobile insurance must provide the same limits of *** coverage to all persons insured under that policy, whether or not an insured person is a named insured or permissive user under the policy.”
In State Farm Mutual Automobile Insurance Company v. Illinois Farmers Insurance Company, Farmers’ car insurance policy contained a step-down provision reducing the policy limits to the minimum liability limits required under the Illinois Safety and Family Financial Responsibility Law, 625 ILCS 5/7-203, 7-317(b) when the insured’s vehicle was being operated by a permissive user who was neither a family member residing in the insured’s household or a listed driver.
The effect of this policy provision was to reduce the available insurance when the car was driven, with permission, by someone other than a family member.
The Illinois Vehicle Code, 625 ILCS 5/7-601(a) of the Illinois Safety and Family Financial Responsibility Law, in pertinent part, provides:
“No person shall operate, register or maintain registration of, and no owner shall permit another person to operate, register, or maintain registration of, a motor vehicle designed to be used on a public highway unless the motor vehicle is covered by a liability insurance policy.
The insurance policy shall be issued in amounts no less than the minimum amounts set for bodily injury or death and for destruction of property under Section 7-203 of this Code, and shall be issued in accordance with the requirements of Sections 143a and 143a-2 of the Illinois Insurance Code, as amended.” 625 ILCS 5/7-601(a) (West 2002).
The Illinois Vehicle Code, 625 ILCS 5/7-203, requires every liability insurance policy issued to provide coverage of not less than $20,000 for the death or bodily injury of any one person, $40,000 for the death or bodily injury of two or more persons, and $15,000 for property damage occurring in any one motor vehicle accident. The court found nothing in the statutory language requiring that a liability insurance policy providing the named insured with coverage in excess of the statutory minimum required by section must provide the same level of coverage to permissive users.
Therefore, the Illinois Supreme Court found that Farmers was permitted to reduce the available insurance coverage when the car was driven by a non-family member.
