American Access Casualty Co. v. Reyes

Summary

The Illinois Supreme Court held that an automobile liability insurance policy may not exclude the sole named insured and owner of the insured vehicle. The court concluded that such an exclusion conflicts with section 7-317(b)(2) of the Illinois Vehicle Code and violates public policy. The court affirmed the appellate court’s judgment reversing the circuit court and remanded for further proceedings.

Holdings

1. An automobile liability insurance policy cannot exclude the sole named insured and owner of the insured vehicle from coverage because the exclusion conflicts with section 7-317(b)(2) of the Illinois Vehicle Code and violates public policy.
2. Named-driver exclusions are generally permissible in Illinois, but they cannot be used to exclude the sole named insured and owner in a manner that conflicts with section 7-317(b)(2).
3. Section 7-602 does not authorize an insurer to exclude the sole named insured and owner from coverage while operating the insured vehicle.
4. Section 7-601(a)'s preservation of policy defenses available at common law does not preserve a named-driver exclusion because such an exclusion is a contractual provision, not a traditional common-law defense.

Questions Presented

1. Whether an automobile liability insurance policy may exclude the sole named insured and owner from liability coverage while the insured vehicle is being operated by that person.
2. Whether sections 7-317(b)(2), 7-602, and 7-601(a) of the Illinois Vehicle Code permit or validate an exclusion of the sole named insured and owner.
3. Whether a named-driver exclusion that conflicts with the statutory requirement to insure the person named in the policy is void as against public policy.

Disposition

affirmed