No UM Coverage Because of Failure to Comply with Insurer’s Requests for Information

Breach of Material Condition Eliminates Right to UM Benefits

Every automobile liability insurance policy and every auto policy that provides uninsured motorist or under-insured motorist coverage requires that the insured cooperates with the investigation of the insurer. That cooperation is a condition precedent to indemnity under the policy and failure to do so can deprive the insured of any of the benefits promised by the policy of insurance. The policies will also contain a private limitation of action provision that allows the insurer to refuse any benefits if the person seeking the benefits fails to act promptly.

In State Farm Mutual Automobile Insurance Company v. Maricela Leon, No. 1-18-0655, 2019 IL App (1st) 180655-U, Appellate Court of Illinois First Judicial District Sixth Division (June 7, 2019) State Farm refused to pay because of the failure of the person making claim to cooperate in the investigation, submit a proof of loss and do so within two years of the accident.


Leon had an uninsured motorist policy through State Farm (the policy). The policy allowed Leon to seek coverage for any bodily injuries she suffered which were caused by another driver who did not have insurance. The policy contained the following condition: “The insured must cooperate with us [(State Farm)] and, when asked, assist us in *** securing and giving evidence. *** Any person or organization making claim under this policy must, when we require, give us proof of loss on forms we furnish.”

The “Legal Action Against Us” section of the policy provided that Leon must make any demands for arbitration within two years following the date of the accident. The policy provided that the limitation period “is tolled from the date proof of loss is filed for the specific coverage involved until the date claim for that coverage is denied in whole or in part.”

On July 9, 2011, Leon was involved in an automobile accident in which she sustained bodily injuries (the accident). Through her counsel, Leon submitted an uninsured motorist claim to State Farm for coverage for her bodily injuries.

State Farm began an investigation into Leon’s claim and sent a letter to Leon’s counsel requesting specific details and documents surrounding the accident. Leon’s counsel submitted the police report from the accident, as well as a letter from Chavez Trucking’s insurer, Progressive Insurance Company (the Progressive letter).  On April 5, 2012, State Farm sent another letter to Leon’s counsel. The letter asked for “the status of our requests” for the “information as itemized” in the previous letters. The letter again listed the requested information. The letter concluded: “If we do not hear from you within 30 days, we will assume you are no longer interested in pursuing a claim for your client *** and we will close our file.”

State Farm did not receive a response from Leon or her counsel. On May 7, 2012, State Farm sent a letter to Leon’s counsel stating that it was closing the file because it had not received a response to its prior letter. State Farm did not hear from Leon or her counsel again until over a year later. Meanwhile, the two-year limitation period in which to demand arbitration expired on July 9, 2013. State Farm eventually faxed a letter to Leon’s counsel stating that, pursuant to the policy, the two-year limitation period to demand arbitration had expired. Minutes later, Leon’s counsel faxed a letter back to State Farm making a demand for arbitration.

State Farm then filed a complaint for declaratory judgment against Leon. The complaint sought a declaration that there was no uninsured motorist coverage available to Leon because she did not demand arbitration within two years following the date of the accident. A bench trial commenced.

Kang, a witness for State Farm testified that State Farm sent several letters to Leon’s counsel requesting that information, as well as a recorded statement from Leon, but never received any response.

Following closing arguments, the trial court ruled in favor of State Farm.  The court concluded that Leon did not file a sufficient proof of loss to trigger the tolling provision of either the policy. Consequently, the court held that Leon’s August 2, 2013 demand for arbitration was untimely.


Leon argues that she filed a sufficient proof of loss, which triggered the tolling provisions and rendered her demand for arbitration timely.

The trial court entered a declaratory judgment in favor of State Farm based on the expiration of the limitation period to demand arbitration. Illinois law recognizes limitation periods as valid contractual provisions in insurance contracts.

Leon’s argument that State Farm waived the proof of loss requirement because State Farm never furnished Leon with any proof of loss forms. Leon argued that the policy does not define “proof of loss,” and so State Farm has waived the proof of loss requirement. The appellate court concluded that this argument was frivolous. The plain meaning of proof of loss for an uninsured motorist claim would be proof that there is no other insurance available to cover the insured’s claim.

The contact information for the driver and owner in the police report was inadequate information, as State Farm requested the specific insurance-related documentation from Leon. The policy required Leon to cooperate with State Farm, and assist in “securing and giving evidence.” The police report and the Progressive letter did not indicate whether Leon was entitled to any workers’ compensation in accordance with the policy nor did  Leon submit any other documents or a recorded statement to State Farm. Thus, the appellate court concluded Leon did not file a sufficient proof of loss to toll the limitation period.

Finding that State Farm continually notified Leon’s counsel that more information was needed in order to move forward with her claim counsel’s sloth left State Farm with nothing provided as reqiored. Indeed, some of State Farm’s letters to Leon’s counsel went unanswered.

The policy made clear that Leon must bring any legal action against State Farm within two years following the date of an accident. It necessarily follows that any requested information must be submitted within that same time frame. Nothing in any of State Farm’s letters, signified that the two-year limitation period had changed.

The trial court’s order of a declaratory judgment in favor of the plaintiff declaring that uninsured motorist coverage is unavailable to the defendant because the defendant did not demand arbitration within two years of her accident was affirmed.


The sloth of counsel for Leon in failing to respond to the requests made by State Farm to allow it to investigate and adjust Leon’s claim deprived her of any benefits she may have been entitled to under the State Farm policy. Fortunately, for Leon, she is not without a remedy. She can seek those benefits from her less than adequate lawyer.

© 2019 – Barry Zalma

This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States.  The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at and

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 51 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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