When an at-fault driver has no insurance or not enough insurance, your own auto policy may become the primary source of recovery. In Illinois, these claims are typically handled under uninsured motorist coverage (UM) and underinsured motorist coverage (UIM). They follow a different path than a standard liability claim because the dispute often shifts from “Who caused the crash?” to “What coverage applies, and how is the dispute decided?”

Many people are surprised to learn that UM/UIM claims can become adversarial, and that some disagreements are resolved through arbitration rather than a typical court lawsuit.

The Illinois UM and UIM Framework

Illinois requires UM coverage in auto policies, and Illinois law also governs how UIM coverage is offered and applied. These rules appear in the Illinois Insurance Code and are implemented through the language of your policy and endorsements.

UM and UIM coverage is intended to place the injured person in a position similar to what would have existed if the at-fault driver had carried adequate insurance. In practice, the way limits, setoffs, and procedures work is often controlled by policy language that must be evaluated early.

Source: 215 ILCS 5/143a (Uninsured Motorist) and 215 ILCS 5/143a-2 (Underinsured Motorist).

Why These Claims Are Different From Standard Injury Claims

In a standard claim, you pursue the at-fault driver’s insurer. In a UM/UIM claim, your own insurer may effectively step into the at-fault driver’s position on liability and damages. Even though it is your carrier, it may dispute:

• Whether the at-fault driver was uninsured or underinsured as defined by the policy

• Whether the crash meets UM/UIM triggers (hit-and-run issues can be especially fact-dependent)

• Whether your injuries and treatment are related to the crash

• The value of the claim

This is a common reason these claims do not “negotiate to a close” the way people expect.

Arbitration in Illinois UM/UIM Claims

Many Illinois auto policies contain arbitration provisions for UM and UIM disputes. In general terms:

• Arbitration is commonly used to decide fault and damages under UM/UIM.

• Some disputes, especially coverage disputes (whether the policy applies at all), may still be decided in court depending on the issue and policy wording.

The practical takeaway is that UM/UIM claims often proceed on a different track from ordinary litigation, and the dispute-resolution mechanism is frequently set by contract.

This is one reason early handling matters. Positioning a claim for arbitration can look different than positioning it for a jury trial, especially on medical causation and damages.

Source: 215 ILCS 5/143a and 215 ILCS 5/143a-2 (statutory framework; arbitration specifics are typically implemented through policy terms and endorsements).

Notice, Cooperation, and Consent Requirements

UM/UIM claims often include procedural requirements that can become leverage points for insurers if they are not handled carefully. Common requirements include:

• Prompt notice of the crash and the claim

• Cooperation with the insurer’s investigation

• Medical authorizations and records review

• In many UIM situations, consent-to-settle and/or advance notice requirements before finalizing any settlement with the at-fault driver’s insurer

The reason consent-to-settle issues matter is that the UM/UIM carrier may claim subrogation rights against the at-fault party. If the carrier argues that those rights were impaired, it may raise a coverage defense based on the policy conditions.

In plain terms, these cases can fail on procedure even where the underlying crash facts are strong. That is why coverage analysis is not an afterthought in UM/UIM matters.

Source: Policy conditions vary; Illinois UM/UIM framework is in 215 ILCS 5/143a and 5/143a-2.

Limits, Setoffs, and Why “Underinsured” Can Be Confusing

UIM does not mean “the other driver has less insurance than your damages.” It typically means the other driver’s limits are less than your UIM limits, and the way recoveries are credited can depend on policy language.

In many cases, the UIM carrier will assert setoffs or credits for amounts paid by the at-fault carrier. The actual mechanics depend on the policy and the type of coverage involved.

This is a frequent source of misunderstanding, especially where the at-fault driver carries only minimum limits or where multiple injured parties are sharing limited coverage.

Source: 215 ILCS 5/143a-2 (UIM).

Why These Cases Often Do Not Settle Easily

UM/UIM claims can stall because the parties are not just arguing about the value of the claim. They may also be arguing about:

• Which policy applies and in what order

• Whether endorsements or exclusions apply

• Whether a procedural condition has been satisfied

• Whether the dispute is headed to arbitration and under what rules

When negotiation does not resolve the case, the policy’s dispute-resolution process (often arbitration) becomes the practical endpoint.