PLIllinoishard
An Illinois insured carries UIM limits of $250,000/$500,000. They are seriously injured by a driver whose BI limit is $100,000, which is paid in full to the insured. Applying the rule of Schultz v. Illinois Farmers, how much is available from the insured's UIM coverage?
A$250,000 — UIM pays full limits independent of the tortfeasor's payment
B$100,000 — UIM matches the tortfeasor's limit
$150,000 — UIM limit minus the tortfeasor's BI payment (offset)
D$0 — UIM does not respond when any tort BI is paid
Why this is the answer
Schultz v. Illinois Farmers established that Illinois UIM operates on a 'gap' or 'offset' basis. The insured's UIM limit ($250,000) is reduced by the amount actually paid by or on behalf of the at-fault driver ($100,000), leaving $150,000 of UIM available. UIM is not stacked on top of the tort recovery; it fills the gap. This offset rule is reflected in standard Illinois UIM policy language and aligns with 215 ILCS 5/143a-2.
Studying for the Illinois Personal Lines exam?
This question comes from our PL bank. Take a free practice test — no signup.