“Illinois does not require stacking.” That is a phrase often repeated by auto insurers and their lawyers. And it is a true statement. Illinois by statute will enforce anti-stacking provisions in auto policies that allow an insured to collect only one limit of liability, particularly in claims for uninsured motorist (UM) or underinsured motorist (UIM) coverage. Some other states will enforce these provisions as well. However, if the policy is ambiguous as to whether one or more limits are available, courts will allow an insured to stack multiple limits, even in Illinois.
The Illinois Court of Appeals, Fifth District, recently addressed an example of this principle in the context of a UIM claim in
Cherry v. Elephant Insurance Company, 2018 IL App (5th) 170072. The two insureds in that case sought to stack multiple UIM limits, one for each of the four vehicles listed on the policy’s declarations.
The Fifth District acknowledged that the policy in
Cherry had an anti-stacking provision. The policy specifically stated: “There will be no stacking or combining of coverage afforded to more than one auto under this policy.” The policy also had a limit of liability provision that stated that the “limit of liability shown on the declarations page...is the most we will pay regardless of the number of...Autos and trailers shown on the declarations page...or...Premiums paid.”
However, the policy’s declarations page listed the limits of UIM coverage “multiple times, once for each vehicle covered.” The Fifth District agreed that “listing multiple numerical limits on the policy’s declaration page does not per se result in aggregation.” Nevertheless, the appellate court noted that the policy’s aforementioned limit of liability section “directs the insured to find the limit of underinsured coverage in the declarations under the limit of liability section for underinsured motorist coverage.” Because the declarations page listed four separate UIM limits of liability, the Fifth District held that the policy’s limit of liability and anti-stacking provisions were in conflict. Accordingly, stacking was permitted.
Interestingly, the Fifth District found an additional ambiguity in how the limits were listed on the declarations. For each vehicle on the policy, the declarations listed the “Limits” for “Uninsured/Underinsured Motorist—Bodily Injury” “Coverage” as “$25,000/$50,000.” The insurance company argued that this listing showed coverage for UM and UIM claims in the amount of $25,000 each person and $50,000 each accident. The Fifth District, however, noted that the words “each person” and “each accident” were not listed on the declarations. Because the declarations separated the words “Uninsured” and “Underinsured” with a slash, and similarly did so with the numerical amounts “$25,000” and “$50,000,” the court held that the declarations could reasonably be read to allow for $25,000 for UM coverage and $50,000 for UIM coverage. Resolving the ambiguity in favor of the insured, the appellate court allowed the two insureds to each stack four limits of $50,000 (for a total for each insured of $200,000) in UIM coverage.
While some states like Illinois do not require stacking of limits of auto coverage,
Cherry makes abundantly clear that courts will allow significant stacking if the policy language ambiguously provides for same.