Matthew Fortin Analyzes Key Illinois Insurance Decisions from Q3 2026 in Law360

BatesCarey partner Matthew Fortin reviews three notable Illinois insurance law rulings from Q3 2026 for Law360. His analysis addresses how long policyholders have to pursue uninsured motorist claims when an insurer disputes coverage, how courts remain split over the illusory coverage doctrine, and when an insured can hire its own lawyer at the insurer’s expense.

Key takeaways from the article include:

• Insurers cannot use their own coverage litigation to run out the clock on uninsured motorist claimants. In Direct Auto Insurance Co. v. Macon-Hamblet, the Appellate Court of Illinois’ First District held that the deadline to begin arbitration is paused while an insurer’s lawsuit over coverage blocks those proceedings, consistent with the purpose of Section 143.1 of the Illinois Insurance Code, which already pauses the deadline while a claim is under review.
• The Seventh Circuit again declined to settle a disagreement over when a policy exclusion makes coverage illusory. In Nautilus Insurance Co. v. Bee Quality Inc., the court held that an exclusion for work completed before the policy began did not undermine a roofing contractor’s coverage, but it acknowledged that its own Wynndalco decision conflicts with the First District’s Visual Pak decision, meaning policyholders may find federal courts more receptive to these arguments.
• A disagreement between co-insureds does not, on its own, entitle an insured to independent counsel at the insurer’s expense. In Consolidated Chassis Management LLC v. Northland Insurance Co., the Seventh Circuit predicted that the Illinois Supreme Court would require a serious, actual conflict between the insurer and the insured, and it rejected the argument, based on its 2011 Wegman decision, that the risk of a judgment above policy limits is a stand-alone basis for that right.

Together, the quarter’s rulings give both insurers and policy holders something to work with. Insurers keep their default right to control the defense, while uninsured motorist claimants gain protection from time-bar defenses built on an insurer’s own delay. The question of when an exclusion makes coverage illusory will likely remain open until the Illinois Supreme Court weighs in.

Click here for the full article.

Matt Fortin is a partner who has spent his career investigating, litigating, and advising clients in all manner of claims and coverage matters.