White Paper · Serious Injury · Illinois

Policy-Limit Archaeology: Finding Every Layer of Coverage

The at-fault driver’s policy is rarely the whole story. Here is how to find every layer, including your own, before a release closes the door.

By Lincoln Square Law · 8-minute read

The most expensive mistake in a serious injury case is often made in the first month, before anyone files anything. A family learns that the at-fault driver carries the Illinois minimum of $25,000 per person, concludes that the case is worth $25,000, and signs a release to get that money quickly. The release is final. Only later do they learn that other coverage existed: an employer’s policy, an umbrella, their own underinsured motorist coverage, or a second responsible party. This paper describes how to find every layer of coverage before a release closes the door, and the Illinois rules that govern each one.

Layer one: the at-fault driver’s liability policy

Illinois requires motor vehicle liability coverage of at least $25,000 for injury to one person, $50,000 for injury to two or more people in one crash, and $20,000 for property damage (625 ILCS 5/7-203 and 5/7-601). Those are minimums, and many drivers carry more. The first step is to confirm the actual limits, not assume them, and to identify every policy that might apply to the driver.

More than one policy can cover the same driver. An owner’s policy in Illinois must include an omnibus clause covering people who use the vehicle with the owner’s permission (625 ILCS 5/7-317). When the driver was using someone else’s car, both the owner’s policy and the driver’s own policy may be in play, typically in a defined order of priority.

Layer two: other responsible parties

Coverage follows responsibility, so identifying every party whose conduct contributed to the injury is also a coverage search.

• Employers. A driver who was working at the time, making deliveries, driving a company vehicle, or running an errand for the employer, may bring the employer’s commercial auto policy into the case under the doctrine of respondeat superior. Commercial policies commonly carry far higher limits than personal ones.
• Vehicle owners and entrustment. An owner who lent a vehicle to someone the owner knew to be unfit to drive may face a separate negligent entrustment claim.
• Alcohol vendors. If the at-fault driver was served at a bar or restaurant, the Dram Shop Act may provide a separate, capped claim with a one-year deadline (235 ILCS 5/6-21).
• Road, property, and product defendants. A dangerous road design, a construction zone, a defective vehicle component, or a property condition can add defendants with their own insurance. Public entities carry immunities and a one-year filing period (745 ILCS 10/8-101(a)), so these claims need early attention.

Each additional defendant also affects how fault is allocated. Under Illinois law, a defendant whose share of fault is less than 25 percent is generally liable only for its own share of non-medical damages, while defendants at 25 percent or more are jointly and severally liable, and all defendants remain jointly and severally liable for medical expenses (735 ILCS 5/2-1117). Those rules can determine whether a verdict is collectible when the most responsible party is underinsured.

Layer three: umbrella and excess policies

Many households and businesses carry umbrella or excess policies that sit above the primary auto or commercial policy. They are easy to miss because they are often written by a different insurer or listed on a separate declarations page. A defendant with significant assets is more likely to have one. Asking directly for all primary, umbrella, and excess coverage, and confirming the answers in writing, is part of the early investigation.

Layer four: your own coverage

The injured person’s own policy is frequently the largest untapped source of recovery.

Uninsured motorist coverage is required in every Illinois auto policy (215 ILCS 5/143a). It applies when the at-fault driver has no insurance or cannot be identified, as in many hit-and-run crashes, subject to the policy’s conditions.

Underinsured motorist coverage applies when the at-fault driver has insurance, but not enough (215 ILCS 5/143a-2). Illinois UIM is generally measured as the difference between your UIM limit and the amount paid by the at-fault driver’s liability insurer. For example, if you carry $250,000 in UIM and the at-fault driver’s insurer pays its $25,000 limit, up to $225,000 of UIM coverage may be available, depending on the policy terms and your damages.

Household policies can matter as well. Depending on the policy language, relatives who live in the same household may be covered under each other’s UM and UIM coverage.

Medical payments coverage, where purchased, can pay early medical bills regardless of fault.

Stacking

People with more than one vehicle or more than one policy often ask whether coverage can be combined. Illinois enforces anti-stacking clauses that are clear and unambiguous, and courts read the specific policy language closely (Hobbs v. Hartford Insurance Co. of the Midwest, 214 Ill. 2d 11 (2005)). The answer depends on the policy documents, including the declarations pages, so they should be obtained in full.

Getting the information

Insurers do not always volunteer limits, and defendants rarely mention an umbrella policy unprompted. Before suit, a written request to each liability insurer for the declarations pages and a statement of all applicable coverage, including excess and umbrella policies, is the usual starting point, and many insurers will respond when the injuries are serious and the request is specific. Your own insurer must provide your policy on request. Once a lawsuit is filed, insurance coverage becomes a routine subject of written discovery and depositions. The goal of the early request is to learn enough to avoid a premature release, and the goal of discovery is to confirm it under oath.

The release trap

Most UIM policies contain conditions about settling with the at-fault driver. A policy may require notice to the UIM insurer before accepting the at-fault driver’s limits, and may give the UIM insurer a period to decide whether to substitute its own payment to preserve its right to recover from the at-fault driver. Signing a release with the at-fault driver without following those conditions can jeopardize the UIM claim. The same caution applies when multiple defendants are involved, because a release drafted for one party can inadvertently release others. Before any release is signed, every policy that might respond should be identified and its settlement conditions satisfied.

Liens and what you actually keep

Coverage is only part of the calculation. Hospitals, doctors, health plans, and government programs may claim reimbursement from the recovery. For health care providers’ liens under Illinois law, the Health Care Services Lien Act limits the total amount of those liens to a percentage of the recovery and sets rules for how the reduction is shared (770 ILCS 23/10). Health plans governed by federal law and government programs follow their own rules. A recovery that looks adequate on paper can shrink substantially after liens, so the lien analysis belongs in the coverage analysis from the start.

A working checklist

• Obtain the at-fault driver’s declarations page and confirm limits in writing.
• Determine who owned the vehicle, whether the driver was working, and whether any business was involved.
• Ask about umbrella and excess coverage for every defendant.
• Pull your own auto policy, including the full declarations page, and identify UM, UIM, medical payments, and household policies.
• Look for additional responsible parties: alcohol vendors, employers, property owners, public entities, and product manufacturers.
• Calendar every deadline, including the one-year periods that apply to public entities and dram shop claims, and the two-year injury period (735 ILCS 5/13-202).
• Identify every lien and reimbursement claim before negotiating a net recovery.
• Do not sign any release until the steps above are complete.

The number printed on the first policy is rarely the whole story. Finding the rest takes a few weeks of disciplined work, and it is almost always worth it in a serious injury case.