Who Are Substandard Auto Insurers?

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This is a post about substandard automobile insurers and Blumenshine Law Group’s fight to win compensation for our clients from these insurers.

Substandard auto insurers (also known as nonstandard insurers) have the following characteristics:

  • They almost always issue policy limits of the statutory minimum to their customers. The statutory minimum limit in Illinois is just $25,000
  • They typically target high-risk drivers who often have poor driving records
  • They usually fight claims instead of paying them

Thus, the substandard insurance carriers combine a toxic brew of high-risk insureds with low policy limits and a combative claims handling process. In recent years, substandard policies have been increasing substantially, with premiums received under substandard auto policies rising from $12 billion in 2014 to nearly $17 billion in 2019.

Substandard Insurer Tactics

Substandard auto insurers are notorious for using delaying tactics to avoid paying out claims to their insureds. They frequently attempt to discourage injured claimants and their attorneys by denying that any coverage exists.  In other words, they will not argue about fault or damages, they simply say the insurance policy was void due to some policy application technicality. The Illinois Department of Insurance Consumer Complaint Report proves this. The most recent annual reports list most of the top ten most complained-about companies are substandard insurers. Claims Handling is far and away the most common consumer complaint.

Blumenshine Law Group has a long winning track record when it comes to dealing with substandard auto insurers. We plan a strategy and implement processes that are geared to prevail in the face of unfair claim denial by substandard insurers. Our method of ethical yet rigid litigation has provided our clients with successful results. We are not afraid to take these insurers to trial when necessary to give our clients their just compensation.

Prevailing Against Sub-Standard Insurer

Case 1: Perez Sanchez v Delphi Insurance Company – The insurer denied our client’s uninsured motorist injury claim. They took the position that she was not a “resident” of her mother’s household and thus not a covered insured. We took the case to trial and won.

Our 25-year-old client was walking in a crosswalk when she was struck by an uninsured SUV that fled the scene. This young lady suffered multiple traumas, including a closed head injury, loss of consciousness, and vomiting at the scene. She had ongoing treatment for her injuries.

The SUV driver had no insurance or assets. Our client was a non-driver, which meant she had no automobile insurance. Because both the at-fault driver and our client had no automobile insurance, the attorneys at Blumenshine Law Group (BLG) had to go beyond the typical liability claim against the at-fault driver’s insurer for monetary recovery. 

Uninsured Motorist Claim Filed

To secure our client compensation, we filed an uninsured motorist claim against the automobile insurance policy carried by our client’s mother. The claim, however, was denied by Delphi Insurance Casualty Company (“Delphi”). This company and other substandard automobile insurance companies typically insure high-risk drivers and provide minimal ($25,000) policy limits. 

After over a year of in-court litigation, BLG secured a victory at trial in the Circuit Court of Cook County. BLG attorney Alex Adeszko handled the case at trial.

Delphi Insurance Position

Delphi took the position that our client did not qualify as an “insured” under her mother’s automobile policy. Specifically, Delphi argued that our client had to be a “resident” of her mother’s household in order to be insured under the policy. Our client, who had a serious head injury, provided her boyfriend’s address to the police investigating the incident, the paramedics on the scene, and the hospital to which she was taken. She told us, however, that she also lived with her mother. We worked to develop the facts that supported our position that our client had two residences – with one being her mother’s home.

The Facts Prevail

BLG presented the facts and the law to the Court on what constitutes a “resident” under uninsured motorist policies in Illinois. We uncovered and proved the following facts: our client maintained her bedroom and personal belongings at her mother’s house, she kept her mother’s address for her mail and bank accounts, she received bills and bank statements at her mother’s address, and she had her mother’s address on her state identification. 

We then proceeded to establish the applicable law in court. First, the law in Illinois allows individuals to have multiple residences. This is important in the case of children as it can make or break coverage – especially for students not living at home full time and children whose parents are separated that split time between two households. Second, Illinois courts require the insurance policy to define policy terms. In policies where a term is not specifically defined, courts will define the policy term strictly against the insurer and liberally in favor of the insured. 

The courts take a fact-specific approach in determining an individual’s residence. When the insurance company fails to define the term “resident” in its policy, as Delphi did here, the term will be construed in favor of the potential insured.

Delphi solely relied on our injured client’s statements at the scene and the hospital as conclusive proof that she was not a resident of her parent’s household, and therefore was not entitled to uninsured motorist coverage for the collision. Delphi failed to take into account the broad legal definition of “residence.” 

Verdict

At the conclusion of the trial, the Court ruled in favor of our client and against Delphi. The Court held that BLG’s client was insured under the Delphi policy as a resident of her mother’s household, and was therefore entitled to uninsured motorist coverage. (See court order). Thus, BLG secured the full policy limits of our client’s uninsured motorist coverage in the face of the insurance company’s denial. This was a hard-fought but ultimately satisfying victory. 

Substantial Victory for Our Clients

The Blumenshine Law Group (“BLG” ) secured a substantial victory for its injured clients in an uninsured motorist coverage claim that was denied by a substandard auto insurance company. Our four clients in this case were all hurt in a serious crash with an uninsured driver. 

After determining that the at-fault driver had no insurance assets or income to pursue, we pursued uninsured motorist coverage through our client’s insurance company, United Equitable Insurance Company (“United Equitable”). Although it received monthly premium payments, United Equitable denied the uninsured motorist claims in reliance upon multiple fine-print technicalities in the policy. 

Taking United Equitable to Court

BLG litigated in court with United Equitable through many motions, briefings, and oral arguments set over more than three years. The trial court ultimately agreed with BLG and decided against United Equitable, ruling that coverage existed at the time of the collision.

United Equitable then filed an appeal to the Illinois appellate court. After an extensive briefing on the issues, the Appellate Court also ruled for BLG’s clients and against United Equitable, upholding the trial court’s ruling.

Specifically, the appellate court held that under the insurance policy, BLG’s clients did not prejudice United Equitable by pursuing the uninsured motorist policy instead of the uninsured, and asset-less, at-fault driver. The appellate court found that United Equitable failed to comply with Illinois law. Therefore, coverage existed at the time of the collision. United Equitable then filed an appeal to the Illinois Supreme Court. The Supreme Court denied the insurance company’s appeal.

BLG Holds United Equitable Accountable

After years of United Equitable’s denials and delays, it tendered the entirety of its uninsured motorist policy limits to BLG’s four injured clients. BLG’s persistence and experience in litigation forced United Equitable to honor its insurance policy to benefit our injured clients.

Contact Us for a Free Consultation 

No one should go up against a substandard auto insurance company alone. Contact our attorneys at Blumenshine Law Group for a free consultation if you have been seriously injured in a car crash. We have a track record of fighting and winning against substandard auto insurers and securing our clients the compensation they deserve. Call or text us today at (312) 766-1000, email us at [email protected], or contact us online to schedule a free case evaluation with one of our attorneys.

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