Article Image
State Farm Mutual Automobile Insurance Co. Demands Arbitration Clause Be Honored

Thursday, November, 21, 2013


In the State of Illinois, State Farm Mutual Automobile Insurance expressed sympathy while simultaneously filing a court motion to dismiss a lawsuit brought against it by an Illinois police officer on the grounds that before any such legal action can be taken, the arbitration clause in its policies must be invoked.


The officer in question had taken out a policy protecting him in case he was involved in a crash with an uninsured motorist.  On April 23, the officer was on duty when he attempted to stop a vehicle driven by an inebriated driver.  The driver instead accelerated and drove his vehicle into the officer’s police car, resulting in juries to the officer.  The officer made a claim through his policy with State Farm, stating that since the injuries were the result of an uninsured driver, the policy applied.


State Farm denied the coverage because the event occurred while the officer was on duty.  The local municipality did not have worker’s compensation insurance.  Faced with medical bills, the officer in turn sued the city, the business which sold the driver alcohol and State Farm for more than $300,000 to cover his expenses – a judgment in excess of $100,000 compensatory damages in excess of $100,000, and punitive damages in excess of $100,000.


State Farm, however, pointed to the binding arbitration agreement that is standard in all of its policies and filed a motion to dismiss, as that arbitration process had not yet been activated.  This is the third round in a series of motions to dismiss filed by all four parties involved in the situation, and it is expected that the judge will grant State Farm’s motion, as the enforceability of arbitration clauses is well-supported in the Illinois courts.