The Illinois Appellate Court has held that an Illinois law blocks recission of an automobile insurance policy that has been in effect for one year or one policy term, even in cases where there were material omissions in the original application.
In January of 2010, Rick and Ruth Jones applied for auto insurance through Standard Mutual Insurance Company. The application asked them to list all the residents of their household, but they failed to mention their two sons: Derrick, 20 years old, and Tyler, 16 years old. Seven months later, Tyler allegedly caused an accident while driving a car owned by his parents and covered by the liability policy. Standard Mutual sued to rescind the policy, arguing that the Jones family made a material representation in the written application by failing to disclose their two sons.
The Jones' defense countered that for specified lines of insurance, Section 154 of the Illinois Insurance Code holds that "a policy or policy renewal shall not be rescinded after the policy has been in effect for one year or one policy term, whichever is less." The trial court found for the defendants, agreeing that because the Jones' auto insurance policy had been in effect for one policy term, it could not be defeated on the grounds on their initial misrepresentation about their family.
The case ultimately becameStandard Mut. Ins. Co. v. Jones, 2012 Ill. App. (4th) 110526. On appeal, the Fourth District materially affirmed the trail court's decision.
Source:Chicago Daily Law Bulletin, Volume 158, No. 79 (2012)