Uninsured Motorist coverage is standard in all insurance policies written in Illinois. When an individual and their insurance company cannot agree on the value of their case, Illinois law requires that the uninsured/underinsured motorist claim (UM/UIM claim) be sent to arbitration for adjudication. (215 ILCS 5/143a).
An UM/UIM arbitration is a legal proceeding held either before a panel of arbitrators or one (1) neutral arbitrator. It is setup much like a trial where parities represented by lawyers call witnesses and present evidence to the arbitration panel. However, unlike a trial where all the issues of fact and law should be decided, the power of the arbitrators to decide a dispute is more limited in scope. The arbitrators only decide the liability of the uninsured/underinsured driver and the damages suffered by the insured. After the hearing, the arbitrators render a monetary decision, which is referred to as an arbitration “award”.
The arbitrator’s decision is binding on everyone if the award amount does not exceed a statutory threshold amount. If the award does exceed the statutory threshold, then either party can reject the arbitration award and demand a jury trial. Illinois recently amended the Illinois Insurance code to raise the limits for binding arbitration. (215 ILCS 5/143a) This bill raises the damage amounts for binding arbitration from $50,000 to $75,000 for a single person and from $100,000 to $150,000 if two or more people are making a claim. The bill takes effect January 1, 2015.
The bill was a result of compromise with insurance carriers and is widely supported by both plaintiff and defense attorneys. As it is, a case may take one or two years to reach arbitration. Many times insurance companies reject high arbitration awards by filing a lawsuit as a delay tactic, preventing an injured person from receiving benefits, including money for medical expenses and pain and suffering. This needlessly forces an injured individual from getting the money they need. The raising statutory limit will make it more difficult for insurance companies to reject an injured person’s award.
Arbitration of UM/UIM claims can be very complicated. It is important to have knowledgeable counsel that understands the Illinois UM/UIM process to protect your rights and help you get the compensation you deserve for your injuries.