LAW OFFICE OF JEROME G. MCSHERRY
Illinois Legal Update
Fall 2005
Automobile Insurance Basics
Illinois law requires drivers to purchase automobile insurance, but many people do not know what is and what is not required by law. A basic understanding of the requirements of the Illinois Safety and Family Financial Responsibility Law will allow you to make wise choices regarding your automobile insurance and to review your coverage to make sure you have enough of the right kinds of insurance.
Automobile insurance in Illinois beaks down into three basic categories. The first category, liability coverage, is required by law and is the insurance that pays for the injuries that you may cause to others because of your own negligent driving. The second category, uninsured and underinsured motorist coverage, is also required by law and is designed to protect you if you are hit by a driver who does not have any insurance or not enough insurance to pay for the damage he or she caused. Finally, first-party insurance, which is not required by law, is designed to protect you from some losses you might suffer because of an accident, such as medical bills and damage to your car.
Liability Coverage
Liability insurance is what most people have in mind when they think about automobile insurance. There are two kinds of liability insurance; bodily injury coverage, which covers the injuries you may cause other drivers or passengers in an accident, and property damage coverage, which covers damage to property caused by an accident, including damage to other cars, street signs, and trees. Currently, the minimum amount of bodily injury liability insurance required by Illinois law is a maximum of $20,000 in injuries per person, with total coverage of $40,000 per accident. State law also requires a minimum of $15,000 of property damage liability insurance per accident. Of course, you may always buy more insurance than required if you choose, and many people decide to carry more than the minimum coverage to protect themselves from lawsuits if they cause an accident that results in more damage than is covered by the minimum amount of insurance required.
Uninsured and Underinsured
Uninsured motorist coverage is similar to liability coverage, except that it benefits you instead of other drivers. Illinois drivers are required to have uninsured motorist coverage with a minimum of $20,000 per person and $40,000 per accident (the same amount as the required liability coverage), insuring that a driver will have the same protection he of she would have had if the other driver did have the required amount of insurance.
Additionally, drivers may be required to carry underinsured motorist coverage, which pays for any damages suffered in excess of the amount of the insurance carried by the person who caused the accident. Underinsured motorist coverage is required when a driver has more than the minimum uninsured motorist coverage.
First-Party Coverage
First-party insurance is not required by law, but many drivers choose to purchase it to protect themselves from the expenses incurred in accidents. Although there are all kinds of "specialized" first-party insurance, such as coverage for towing charges, custom items installed in your car, and accidental death benefits, the most common kind of first-party insurance covers medical bills and physical damage.
Medical payment insurance covers exactly what it sounds like it covers – the medical bills caused by an accident – and it will pay for your medical expenses even if you are responsible for the accident. Physical damage coverage covers damage to your car caused by an accident (even if it your fault). It may be limited to collision coverage, which only covers damage caused by an actual collision, or comprehensive coverage, which covers others losses, such as theft or hail damage.
Armed with this overview, take some time to review your insurance coverage to make certain that you and your family are well protected.
Retirement Guide for Small Businesses
The Internal Revenue Service has created a free CD-ROM that is designed to help small businesses establish and maintain retirement plans for employees. Sections on setting up contributions, investments, and distributions have information not only from the IRS, but also from the Securities and Exchange Commission, the Federal Deposit Insurance Corporation, and the Social Security Administration. Some of the contents of the CD-ROM include:
- Rules for traditional and Rot IRAs, as well as other retirement plans;
- Investing your IRA;
- Publications and forms;
- Retirement calculator;
- Video clips on retirement planning;
- Frequently asked questions;
- Research material on IRAs; and
- Links to more retirement information on government websites.
You can order the CD-ROM online at www.irs.gov/retirement or call toll free 800-829-3676 and request Publication 4395.
Safeguards for Electronic Banking
In banking as in so many other areas, the trend is clear: We continue to move steadily away from traditional paper transactions toward high-tech means of conducting our business. It will not happen overnight, though, and even the most technophobe among us should be assured that there are some federal laws and regulations in place thatwill make the transaction easier and more secure.
Electronic Fund Transfer Act
The methods for electronic fund transfers (EFTs) are already commonplace for many bank customers. They include ATMs, debit or check cards, preauthorized deposits and withdrawals, and telephone transfers. The federal Electronic Fund Transfer Act answers some basic questions about using EFT services. The Act is especially important when things go wrong, providing rules for the correction of errors and dealing with loss or theft.
Financial institutions must provide documentation of EFTs in two forms: terminal receipts and periodic statements. Among other pieces of information, both documents must include the type of transfer, the amount and date of the transaction, and the location of the terminal. For preauthorized transfers that occur at regular intervals, the institution must provide a notice that the transfer occurred as scheduled.
As with credit cards, financial institutions must investigate and promptly correct any EFT errors reported by the customer, but there are some differences in the details. For errors like unauthorized or incorrect EFTs, or omission of an EFT from a statement, a customer should contact the institution as soon as possible, and no later than 60 days after receiving the statement showing the error. As a general rule, the institution must promptly investigate and resolve the matter within 45 days. If more than 10 days pass, it must make the correction, subject to the results of the investigation. Such a recredit is made final if the institution finds an error; if it does not, it must explain the outcome of its investigation in writing to the customer.
Loss Limits
If your credit card is lost or stolen, your loss is limited to $50 per card. That is also the general rule for an EFT card or code, but with the important caveat that procrastination in reporting a lost or stolen EFT card or code can be much more expensive. The exposure limit jumps to $500 for a consumer who does not report the loss of theft within two days of learning of it. Not only that, but failure to report an unauthorized transfer within the 60 day period for doing so creates unlimited exposure to losses from transfers made after the 60 day period.
Proceed with Caution
The Federal Government provides some EFT protection for old hands and novices alike, but the best approach is to combine that protection with your own safe practices. Keep a low profile for thieves and scam artists by protecting your personal information, such as bank account numbers, passwords, and Social Security numbers. Never respond with such information to unsolicited telephone calls or e-mails. Verify the legitimacy of a website address before providing personal information on the site. It is a good idea to have virus protection and a "firewall" on your computer to keep hackers out. Finally, keep good banking records and review each bank statement promptly so that you can report anything suspicious you see in time for it to do you the most good.
Self Storage Facilities in Illinois
The commercial leasing of storage space has become a widespread and successful business enterprise. Over 20 years ago, Illinois enacted the Self-Storage Facility Act.
The crux of the Act is that owners have a lien on all of the contents of the storage space. The lien permits the owner to sell the contents of the storage unit after a default by the occupant. After the occurrence of the default, the owner must notify the occupant in writing and then he or she can advertise and sell the occupant’s stored property. The owner’s written notice must be very detailed and must meet specific requirements of the statute, including an itemized statement, a demand for payment within a specified time, an announcement of the owner’s lien, and information about the owner’s intention to sell the property.
After the time for payment expires, the owner must publish an advertisement of the sale or other disposition of the property once a week for two consecutive weeks. The sale must be held at or neat the storage facility premises. The occupant can regain the stored property by paying all money due on the rental, plus the owner’s reasonable expenses, any time prior to the actual sale. Otherwise, the owner can take the proceeds of the sale to satisfy the overdue rent. However, the owner is required to hold any excess proceeds for two years, subject to claim by the occupant.
Owners must strictly comply with the precise language of the statute. If an owner sells, moves, or otherwise interferes with an occupant’s property without proper notice to the occupant, the owner may be liable to the occupant for damages.
If you have valuable property at a storage unit, you should be aware of the substantial remedies and powers the owner holds over your goods. If you neglect or forget to pay your rental fee when due, you may be very close to losing your possessions. While few rental unit owners are likely to pursue these legal remedies aggressively after only a short default, they are entitled to do so.
If you own a storage facility, you should be familiar with the authority and remedies established in the law. Pay particular attention to meeting all of the specific requirements regarding the written notice you own defaulting occupants. The only Illinois case addressing the Act states that the existence of a lease does not negate the requirements of the Act. Thus, the terms of your rental contracts should be consistent with the language of the statute.
Most people would recognize that the growth of the Internet has significantly changed the way we do business. However, a recent case shows that it may also change how, and when, we go to court.
The case involves two husband and wife teams that breed Tibetan mastiffs, a rare dog. One couple, located in Illinois, sued the other couple, located in Oklahoma, in Illinois court. The Illinois breeders’ complaint was that the Oklahoma breeders had defamed them, invaded their privacy, and interfered with their contracts to sell dogs by posting negative comments about their dogs on the Internet. The Oklahoma breeders responded by asking that the suit be dismissed, based on the claim that they had no contact with Illinois and therefore could not be sued there.
The Illinois appellate court found that although the Oklahoma breeders had placed one telephone call and mailed one letter in connection with the purchase of dogs to the Illinois breeders, this contact was not enough to allow them to be sued in Illinois. However, the court went on to find that because the Oklahoma breeders maintained "interactive" website permitting people to e-mail them, and because they had placed messages about the Illinois breeders’ dogs in Internet chat rooms accessible from anywhere, all of these contacts (taken together) were sufficient to allow the Oklahomans to be sued in Illinois.
Although merely using the Internet may not be enough to allow one to be sued anywhere in the country, use of the Internet in conjunction with other contacts may be. As a result, a business owner should carefully consider whether use of the Internet might expose him to suit in distant jurisdictions.