News & Insights

Letter By Insured's Attorney Notifying Insurer of UIM Claim Constituted Arbitration Timely Demand

01 Jan 2003

The Illinois Appellate Court held that a letter by insured's attorney notifying insurer of underinsured motorist (UIM) claim was a timely demand for arbitration. Hale v. Country Mutual Insurance Co., 334 Ill.App.3d 751, 778 N.E.2d 721, 268 Ill.Dec. 455 (5th Dist. 2002). In Hale, the insurance policy at issue, which included $100,000 UIM coverage, required that a demand for arbitration be made within two years of an accident. The insured's attorney sent a letter to the insurer notifying the insurer of the accident and stating that it appeared to be an UIM claim, but the letter did not demand arbitration. The Court held that the language of the letter was not perfect; however, it served the purpose of notifying the insurer of the UIM claim and that the insurer obviously received the letter because the insurer acknowledged it in writing. Also, the letter triggered the insurer's claims handling process and the insurers' actions acknowledged notification, which is the purpose of the two year contractual limitations period. Further, the court reasoned that the only way to recover UIM benefits is arbitration so the letter served as notice of an impending arbitration.