Driving without a license may make you uninsured

In a consolidated case that involved six drivers that drove cars that were insured by Founders Insurance or Safeway Insurance, the issue was whether Founders and Safeway should pay for injuries caused by a driver that drove the car without a license. Founders and Safeway argued that they did not have to pay because their policy excluded drivers who do not have a drivers license. Five of the drivers had no license, while the sixth driver had a suspended license.

The Founders insurance policy had several exclusions to its liability coverage. One of the exclusion stated that coverage does not apply “to bodily injury or property damage arising out of the use by any person of a vehicle without a reasonable belief that the person is entitled to do so.” Founders argued that a person without a drivers license or a person with a suspended drivers license cannot have a reasonable belief that they are entitled to use the vehicle.

The Safeway insurance policy had a similar exclusion. The policy excluded any person “operating an automobile without a reasonable belief that he or she is entitled to do so.”

In the case of Founders Ins. Co. v. Munoz, 237 Ill.2d 424 (2010), the Illinois Supreme Court agreed. The Court stated “The policy provision at issue here precludes liability coverage when the person using or operating the vehicle does not have a “reasonable belief” that he or she is “entitled” to do so. Based on this language, Founders and Safeway argue that a person who has not been issued a driver’s license, or whose license has been suspended or revoked, cannot have a reasonable belief that he or she is entitled to drive merely because he or she owns the vehicle or was granted permission to use the vehicle…”

The court began with the language of the policy and, in particular, the word “entitled.” The court looked up the word in a dictionary for its plain meaning and noted,

“Under both policies, an “insured person” includes the named insured and any person using the owned vehicle with the permission of the named insured. As Founders and Safeway note, unless the person qualifies as an “insured person,” the coverage exclusions never come into play because the person is not covered by the policy in the first instance. This means that the term “entitled,” as used in the subject exclusion, cannot refer to entitlement based on permission or ownership because the issue of whether the person using the vehicle has a reasonable belief that he or she is entitled to do so only arises after issues of permission or ownership have been satisfied.”

“The question remains whether the “average, ordinary, normal, reasonable person” for whom these policies were written … would understand that the exclusion applies to unlicensed drivers. We agree with Founders and Safeway that the answer is “yes.” Illinois law with respect to driving privileges is clear. With limited exceptions not relevant here, no person shall drive a motor vehicle in this state unless such person has a “valid license.” 625 ILCS 5/6-101(a), (b) (West 2008). A person driving on a revoked or suspended license is guilty of a Class A misdemeanor. 625 ILCS 5/6-303(a) (West 2008). Irrespective of whether a person owns the vehicle, or is a permissive user, without a valid license, a person cannot have a reasonable belief that he or she is entitled to drive in this state. Without a valid license, a person has not been given the “right” to drive; has not been “qualified” to drive; has not been “furnished with proper grounds” for doing so….. Accordingly, each of the six drivers at issue here, who either never obtained a license or whose license was suspended, could not, as a matter of law, have a reasonable belief that he was entitled to drive simply because he owned the car or was given the keys.”

The decision of the Illinois Supreme Court will leave many accident victims without compensation for their injuries, if the driver that caused the accident had no license or had a suspended license and had an insurance with a similar exclusion. There are insurance companies that sell insurance policies to persons who do not have drivers license. It is essential to review the provisions of your policy for any exclusions to protect yourself and others on the road.

While we do not dispute the Illinois Supreme Court’s observation that a person without a license is violating the law by driving, the reality is that many people drive without a license because they are undocumented This decision will leave taxpayers to pick up the tab for medical expenses for injured victims. We urge the legislators to act to prevent this from happening.

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