Background
Ronald Saslow and a passenger were injured in a car accident. The Saslows carried auto and umbrella insurance with Bankers Standard Insurance covering five vehicles with separate premiums. The auto policy included medical expense and uninsured/underinsured motorist (UM/UIM) coverage, with the umbrella policy providing an additional $1 million UM/UIM limit “per occurrence.” After receiving $879,832 from the other driver’s insurer, the Saslows filed claims with Bankers Standard.
Bankers Standard paid $100,000 in medical expenses under the auto policy and $1 million in UM/UIM coverage under the umbrella policy. The Saslows sued for additional payments, arguing they should be able to “stack” the coverage limits across their five vehicles or recover multiple times because of the accident’s circumstances. They also sought attorney’s fees based on Bankers Standard’s delay in issuing payments, which required multiple replacement checks over four months. The district court granted summary judgment to the insurer.
The Court’s Holding
The Seventh Circuit affirmed that the insurance policies’ anti-stacking language was unambiguous and effective in prohibiting the Saslows from recovering multiple times under the same coverage type. The court emphasized that both the auto policy and umbrella policy explicitly stated that coverage limits represented “the most we’ll pay” for each occurrence “no matter how many people or vehicles were involved.” This language, read in context with the definition of “coverage limit” and “occurrence,” broadly prohibited stacking regardless of whether the policies specifically enumerated every conceivable stacking scenario.
The court rejected the Saslows’ argument that the repeated listing of coverage limits on two separate pages of the declarations indicated authorization to stack. The court found the repetition was merely a matter of physical page limitation for displaying five vehicles and did not create ambiguity. The court also rejected alternative arguments based on the rental car and multiple tortfeasors involved in the accident, finding these factual circumstances did not trigger additional coverage under the policy’s language.
Regarding the delay in payment, the court held that while Bankers Standard was approximately two months late, the insurer’s repeated good-faith attempts to issue checks demonstrated no willful or vexatious conduct. Under Illinois law, a delay in payment must be willful and unreasonable to warrant attorney’s fees under the Illinois Insurance Code. The court found the district court did not abuse its discretion in concluding the delay, standing alone, did not meet this threshold.
Key Takeaways
- Broad anti-stacking language prohibiting recovery regardless of multiple vehicles or persons is effective and unambiguous, even without listing each specific stacking scenario by name.
- Multiple appearances of coverage limits on a policy’s declarations page do not authorize stacking or create ambiguity merely by repetition.
- An insurer’s delay in payment, even if it extends beyond the contractual 60-day period, does not constitute “vexatious and unreasonable” conduct warranting attorney’s fees if the insurer demonstrates good-faith compliance efforts.
Why It Matters
This decision provides important guidance on the scope of anti-stacking clauses in insurance policies. The Seventh Circuit clarifies that insurers need not enumerate every possible stacking scenario to make such provisions enforceable—broad language stating that coverage limits represent the maximum payout “no matter how many people or vehicles” are involved will be read to prohibit stacking across multiple policies or vehicles covering the same accident. This favors consistency and predictability in insurance contracts.
The ruling also establishes a high bar for claims that an insurer’s payment delay is “vexatious and unreasonable” under Illinois law. Where an insurer makes genuine attempts to comply with contractual payment obligations despite administrative errors requiring replacement checks, mere lateness does not suffice—there must be evidence of willful intent to delay. This protects insurers from liability for good-faith payment mistakes while still holding them accountable for intentional delays.