Tufano (Tufano) was a passenger in a car that collided with another car. As a result, she suffered significant, permanent injuries that she valued in the millions of dollars. in a payment of $295,000). Tufano also had underinsured-motorist coverage of her own in the amount of $500,000 with plaintiff Illinois Emcasco Insurance Company (Emcasco).
In this declaratory-judgment action, Emcasco says that it is only required to cover the difference between what Tufano received from the two drivers collectively ($395,000) and what she contracted for with Emcasco ($500,000), so that Emcasco only owes her $105,000 in underinsurance coverage. Tufano, on the other hand, says that she should be able to apply the $500,000 underinsurance coverage as to each driver separately, such that she would receive $400,000 in underinsurance coverage for the first driver (who was only insured for $100,000) and $205,000 in underinsurance coverage from the second driver (who paid $295,000), for a total of $605,000 from Emcasco.
Emcasco moved for judgment on the pleadings, and Tufano moved for summary judgment. The circuit court agreed with Emcasco and entered judgment in its favor.
Based on long-settled case law, we disagree with the ruling of the circuit court, which adopted Emcasco’s position. Emcasco may not collectively offset the sum total paid by the two drivers ($395,000) from its $500,000 underinsured-motorist policy and claim that it only owes Tufano $105,000. Rather, we agree with Tufano that each instance of underinsurance must be considered individually. Viewed in that way, Tufano would ordinarily be entitled to receive $400,000 in underinsurance coverage for the first driver (who was only insured for $100,000) and $205,000 in underinsurance coverage for the second driver (who paid $295,000), for a total of $605,000. But Tufano’s underinsurance policy with Emcasco was only for $500,000, and she cannot receive more than the $500,000 for which she contracted, and on which the policy premiums were based. Thus, we disagree with Tufano that she is entitled to $605,000; at most, she could receive $500,000 from Emcasco for the underinsurance of the two drivers. We vacate the trial court’s ruling and remand for further proceedings. On remand, the court shall enter summary judgment in favor of Tufano on the question of liability. On the question of damages, Tufano is entitled to no more than $500,000 from Emcasco. But because Tufano’s actual damages from the car accident have not been determined as a matter of fact or stipulation, and to prevent Tufano from obtaining a double recovery, the trial court must conduct a hearing to determine the extent of Tufano’s damages and whether they exceed what the two drivers have already paid her, and to the extent they do, she will be entitled to recovery from Emcasco up to $500,000.