Ill App 1st

Initial Disclosure of Umbrella Not Required

The Illinois Appellate Court for the First District, in an opinion written by Justice Lampkin with Justices Reyes and Martin concurring, applying Illinois law, affirmed the judgment of the circuit court holding that insurers were not required to disclose the existence of an umbrella insurance policy in response to a demand under section 143.24b of the Illinois Insurance Code.

This litigation began with personal injury claims arising from motor vehicle collisions and damages between the plaintiff Penny Kim and an individual insured by defendants State Farm Mutual Automobile Insurance Company and State Farm Fire and Casualty Company (collectively, “State Farm”). In May 2012, Kim’s counsel wrote to State Farm: “Pursuant to 215 ILCS 5/143.24b, please disclose your insured’s policy limits.” In response, State Farm disclosed the insured’s bodily injury automobile coverage of $100,000 per person and $300,000 per accident. Shortly thereafter, after additional prompting from Kim’s counsel, State Farm also disclosed an umbrella policy with a $1 million limit for liability coverage. Also, State Farm’s insured omitted the umbrella policy while responding to interrogatories related to disclosure of insurance policies.

Kim then sued State Farm asserting three claims in relation to the initial omission of the umbrella policy: common law fraud, violation of section 143.24b of the Illinois Insurance Code (215 ILCS 5/143.24b), and violation of the Consumer Fraud and Deceptive Business Practices Act (“Consumer Act”) (815 ILCS 505/1, et seq).  The circuit court granted State Farm’s motion for summary judgment and dismissed Kim’s claims.

The Appellate Court upheld the dismissal of all three counts. Section 143.24b provides that “[a]ny insurer insuring any person or entity against damages arising out of a vehicular accident shall disclose the dollar amount of liability coverage under the insured’s personal private automobile liability insurance policy” upon receipt of a certified letter and a description of the nature and extent of the injuries. The Appellate Court stated that “[i]t is well settled in Illinois that a personal automobile insurance policy is not the same as an umbrella policy.” Because an umbrella policy is outside of the scope of section 143.24b, State Farm was not required to disclose it upon the demand of Kim’s counsel.

The Appellate Court found that the fraud claims failed for the same reason because the disclosure of excess umbrella insurance was not itself required under the statute. Moreover, the insured’s misstatement in the interrogatories cannot be attributed to State Farm and Kim never suffered any actual injury resulting from the omission. Finally, recovery under the Consumer Act is available only to consumers or plaintiffs who satisfy the “consumer nexus” text, neither of which applied to Kim. For these reasons, the Appellate Court upheld the circuit court’s grant of State Farm’s motion for summary judgment. Kim v. State Farm Mutual Automobile Insurance Co., 2021 IL App (1st) 200135 (June 30, 2021).