Radogno, Dillard bill eliminates insurance coverage step-down

August 24, 2007

Springfield, IL - A measure sponsored by State Sen. Christine Radogno (R-Lemont) and Kirk Dillard (R-Hinsdale) was recently signed into law that will require automobile insurance companies to provide the same amount of coverage for any permitted drivers.

Radogno explained that the legislation, Senate Bill 1208, requires all automobile insurance policies to provide the same amount of coverage for any permitted driver, while prohibiting insurance companies from “stepping-down” coverage amounts when drivers other than the insured car owner are involved in an accident.

“It came to our attention that the Legislature needed to clarify whether insurance companies should be allowed to `step-down’ the amount of insurance coverage available in the event of an accident, in the event someone other than the owner was driving the insured car,” explained Radogno. “Basically, if I loan my car to my next-door neighbor to run an errand, I want to know that the insurance company can not reduce the insurance coverage below what that coverage is for me, as the policy holder.”

Radogno said that most automobile insurers do provide full coverage for permissive drivers and do not step down coverage; however, noted that there are a few insurance carriers in Illinois that still follow the step-down policy, which mad the law necessary.

Dillard explained that this issue resulted in litigation between two of the state’s largest insurance companies; the case is currently on appeal before the Illinois Supreme Court. The Senator said that Illinois case law has consistently determined that insurance follows the car, rather than being determined by who is driving the vehicle.

“This is just good, common-sense legislation that protects consumers,” said Dillard. “The bill presumes that an automobile driver insures a vehicle to the usual maximum limits of $100,000 per person and $300,000 per occurrence. In the event of an accident, the named insured vehicle would then be covered at that amount even if someone else is driving the vehicle.”

Senate Bill 1208 will take effect January 1, 2008.

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