Elizabeth Zdeb was struck by an insured motorist’s vehicle while she was out walking. Zdeb received the full policy limit, $50,000, from the tortfeasor’s insurance company and sought additional coverage through her own insurance company claiming underinsured motorist coverage benefits. The policy allowed Zdeb to collect $100,000 for bodily injury and $50,000 for medical payments, with a provision allowing certain setoffs.
Zdeb filed a declaratory judgment action seeking a declaration that the medical payments coverage provided by her insurer could not be offset from her total underinsured motorist policy after she received less than she believed she was entitled to. Allstate responded with a motion for summary judgment which the trial court granted. Zdeb appealed and the appellate court affirmed.
Zdeb’s appeal relies on the argument that Allstate violated public policy when it reduced the amount of her underinsured motorist coverage, $100,000, by $38,952.53, the amount paid for medical expenses under her medical payments coverage policy. Disagreeing, the court cited Adolphson v. Country Mutual Insurance Co. for the proposition that an insurer may offset a total coverage amount by amounts paid under other coverages in the same policy. 187 Ill. App. 3d 718 (1989). In the case at hand, the court found that the language of Zdeb’s policy unambiguously allowed for such a reduction. Over Zdeb’s public policy based objections, the court found that her policy satisfied the objective of Illinois’ uninsured motorist statute by effectively “filling the gap” between her coverage and the policy limits of the person who injured her. 216 ILCS 5/143a-2(4). The court also noted that public policy is not violated by allowing setoffs where there is no risk of double recovery in situations involving a single tortfeasor. Taking into account the $50,000 paid by the tortfeasor’s insurer, the $38,952.53 paid by Allstate for Zdeb’s medical bills, only $11,047.47 was needed to satisfy Zdeb’s $100,000 policy. Therefore, as Allstate paid Zdeb $11,047.47, she received the full amount of underinsured motorist coverage to which she was entitled.