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ILLINOIS
LEGAL UPDATE
WINTER 2010 ISSUE
Auto Accidents and Auto Insurance
Q:
Am I required to have automobile insurance? If so, how much?
A:
Anyone operating a motor vehicle on public highways in
Illinois
is required to carry automobile insurance. The minimum amount of coverage
required is $20,000 for injury to another person, $40,000 for injury to two or
more people, and $15,000 for property damage. Insurance policies must also offer
a minimum level of uninsured and underinsured (“UM/UIM”) coverage in case the
other driver is not insured in an amount identical to these limits, although
this coverage can be rejected. Additionally, a driver is required to carry proof
showing that he or she has at least the minimum required coverage.
Q:
Should I obtain more than the minimum coverage?
A:
That depends. All drivers must carry the minimum coverage required, but more
coverage might be advisable to protect your assets. If you are responsible for a
collision that causes damage that exceeds your insurance coverage, you might
have to pay the difference from your assets. You might also consider getting
other kinds of insurance, such as collision (which covers damage to your
vehicle) and comprehensive (which covers damage from such things as hail and
falling trees). You might also choose to get more UM/UIM coverage.
Q:
What do I do if I am involved in a collision?
A:
First, notify the police. Get the name and address of the other driver, his or
her insurance information, and the names and contact information of any
witnesses. Afterwards, promptly contact your insurance company.
Q:
What will my insurance company do?
A:
Your insurance company will
protect your rights after a collision. If necessary, it will hire a lawyer to
defend you and it will pay out for injuries you may have caused, up to the
amount of the policy.
Q:
What if the collision is not my fault?
A:
The other driver's insurance
company should do the same for him or her as your insurance company does for
you. It may try to settle your claim, offering money for repairs to your vehicle
and for your injuries. If you are uncertain about your rights or the value of
your claim, consult a lawyer.
Q:
What if the other driver does not have insurance?
A:
This is when your UM/UIM coverage is valuable. Instead of making a claim against
the other driver's insurance, you make a claim against your own UM/UIM
insurance. Your carrier should then try to settle your claims, compensating you
for your losses.
Q:
What if the other driver has insurance coverage, but not enough?
A:
If the other driver's insurance coverage is not enough to cover your loss, you
would still make a claim against your UM/UIM coverage, which covers underinsured
motorists.
Q:
What if I have more questions or a complaint about my insurance company?
A:
Contact the Illinois Department of Insurance at 1‑866‑445‑5364, or check out its
website, www.insurance.illinois.gov.
Tax Breaks for College Costs
Persistently increasing college costs may have joined death and taxes as
inevitable facts of life. Still, it is usually possible to soften the blow of
escalating costs of higher education by taking advantage of an assortment of
income tax breaks provided by the federal government. The options and their
ramifications for your tax bill are not as simple as they might be, so it may be
prudent to get some professional advice. Given the large sums of money at stake,
you do not want to leave any smart moves unmade for lack of information and
timely advice.
American
Opportunity Tax Credit
This
year, the American Opportunity Tax Credit effectively replaces the Hope
Scholarship Credit. Taxpayers spending at least $2,000 for tuition, fees, books,
and materials for higher education can save $2,000 in taxes with a
dollar‑for‑dollar credit. Expenses over $2,000 bring an additional tax credit of
25 cents on the dollar, and, if expenses reach $4,000, there is a maximum credit
of $2,500. The credit is available per student, so that a family with more than
one college student can achieve even larger total benefits. Up to 40% of the
American Opportunity Tax Credit is refundable, so that some of the tax credit
may be received as a tax refund if the credit for which the taxpayer qualifies
exceeds his or her income tax liability. This credit phases out for taxpayers
with a modified adjusted gross income between $80,000 and $90,000 ($160,000 and
$180,000 for married couples filing jointly).
Lifetime Learning Credit
While
the American Opportunity Tax Credit is limited to the first four years of
education after high school, the Lifetime Learning Credit, as the name suggests,
may be claimed for any year of higher education, such as years spent in graduate
or professional schools. Another distinction between the two credits is that the
Lifetime Learning Credit is available for any course of study relating to job
skills at an accredited school, whereas the American Opportunity Tax Credit
requires that the student be enrolled at least on a half‑time basis. The
phaseout income ranges are lower than for the American Opportunity Tax Credit,
by margins of $30,000 for individuals and $60,000 for married couples filing
jointly.
Calculated at 20 cents on the dollar, the Lifetime Learning Credit maxes out at
$2,000 for $10,000 in tuition and related expenses. It is not refundable. Unlike
the American Opportunity Tax Credit, which is determined per student, the
Lifetime Learning Credit is calculated per taxpayer, so that any one taxpayer
has the above maximum no matter how many individuals in a family are studying at
the postsecondary level. A taxpayer may not use both credits for the same
student in the same year, but different credits may be used for different
students' expenses in the same year.
Tuition and Fees Deduction
A tax
credit, by shaving off the actual tax bill, does more for a taxpayer's bottom
line than a deduction, which only reduces the income on which the tax will be
imposed. Still, there is a third option in the form of a tax deduction for
tuition and related fees, although it cannot be used in the same year for the
same student as either of the tax credits previously described. This deduction,
which is available even for taxpayers who do not itemize deductions, can be as
large as $4,000 for modified adjusted gross incomes up to $65,000 ($130,000 for
married couples filing jointly). The deduction is cut in half for even one
dollar above those incomes, and disappears altogether when the income levels top
$80,000 ($160,000 for married couples filing jointly). Another limitation on
this deduction is that it cannot be claimed for expenses paid with money from a
Section 529 plan or withdrawals from a Coverdell Education Savings Account.
Wallyball in the Workplace
It is
possible to injure oneself at work in many different ways, as a recent workers'
compensation case shows.
The case
involved a fitness instructor at a municipal park who injured his leg. The
injury occurred while he was playing a game of wallyball, a game similar to
volleyball, but played on a racquetball court. The instructor's employer
disputed his claim for compensation, arguing that he was injured while engaged
in a “voluntary recreational program” and that his injury thus was not
work‑related.
The
court disagreed. The evidence showed that the instructor had been asked to play
wallyball by another employee and that he had initially declined. However, the
other employee told the instructor that if he did not agree to play, the game
would have to be canceled for a lack of people, and so the instructor agreed to
play.
Pointing
to evidence that the instructor thought it was his job to promote the programs
offered by his employer, the court held that the instructor was not playing for
his own “diversion” but, rather, to “accommodate customers.” Because he was
injured while helping customers, his injury was work‑related enough to recover
workers' compensation.
Snow and Ice Removal in Illinois
To the
undoubted relief of property owners in
Illinois, whether public or private, the law does not
generally impose on them an obligation to shovel away naturally occurring snow
or ice from their property during the winter.
Because
property owners have no duty to remove snow or ice, the courts have developed a
legal rule known as the “natural accumulation” doctrine, which holds that
property owners cannot be held liable for injuries caused by their failure to
remove natural accumulations of snow and ice from their property. In other
words, after a snowstorm, a property owner may choose to remain inside (where it
is warm) and is not considered negligent if a person slips and falls because the
property owner failed to shovel or salt the walkway or sidewalk. The natural
accumulation doctrine essentially recognizes that property owners cannot
guarantee perfect conditions on their property, particularly during the winter.
On the
other hand, property owners can be held liable for injuries that are caused by
unnatural accumulations of snow and ice on their property. Examples of unnatural
accumulations of snow and ice include snow piles created by snow removal
efforts, or ice that has formed because of an artificial condition, such as a
fountain.
The
distinction between natural and unnatural accumulations of snow and ice is
significant because snow removal is an important job for many local governments
throughout Illinois,
and a common side effect of snow removal is the creation of piles of snow and
ice that might cause accidents.
In one
case, a county in Illinois
was held liable for an accident that occurred when a driver's view at an
intersection was blocked by a snow pile that was created when the county cleared
the snow out of the intersection itself. The driver was able to show that the
pile of snow (which was taller than his car) was an unnatural accumulation that
would not have been there except for the county's snow removal efforts. Because
the evidence showed that the snow pile was created when county workers plowed
the roads, it was not difficult for the driver to prove that the county workers
knew that the snow pile existed, and that they were aware of the snow pile's
height and that it was located in a place that blocked some drivers' views of
the intersection.
Illinois
law recognizes the common‑sense approach to snow and ice removal. The lesson is
that if you elect to remove snow or ice from your property, do it in a way that
does not create a condition that is more dangerous than if the snow had been
left in place.
Statutes of Limitations and Statutes of
Repose
The
statute of limitations and the statute of repose are vital instruments of Illinois law that provide
time limits, closure, and peace of mind to potential parties involved in
lawsuits. A statute of limitations provides a time limit within which a party
can bring a lawsuit, or the state can bring a criminal charge. For example, a
person who suffers a personal injury has two years from the time the cause of
action accrues to file a lawsuit against the offending party. A cause of action
accrues either when the injury occurs or when the injured party discovers that
he or she has been injured.
Illinois
law allows for some latitude in the statute of limitations on personal injury
actions through what is commonly known as the “discovery rule.” The discovery
rule allows the statute of limitations to be extended from the time of the
injury to the time of the discovery of the injury. This rule is commonly applied
in cases involving medical malpractice, in which a person may not discover at
the time that the malpractice occurs that it did indeed occur or that he or she
was injured.
There
are statutes of limitations for virtually every cause of action. If there is no
specific provision for a cause of action, there is a “catch all” provision that
sets a five‑year limitations period for all civil claims not otherwise provided
for by law. Crimes also have specific statutes of limitations. However, there is
no statute of limitations for first‑degree murder or for other severe felonies.
The state can bring a charge of murder against a suspect at any time after the
murder, regardless of the passage of time.
A
statute of repose is similar to a statute of limitations in that it sets a
specific time limitation on claims that may be brought against a particular
party. A statute of repose sets a maximum or outside time limit after which a
cause of action cannot be brought. Statutes of repose usually apply to the
construction of a structure or the manufacture of a product. The statute begins
to run from the time of the completion of the construction or from the sale,
lease, or delivery of the product rather than from the time of any injury. The
statute of repose on products liability actions is usually 10 years. For
example, if a purchaser is injured while working with a defective circular saw
sold to the purchaser 11 years earlier, he or she will be barred from bringing a
cause of action against the manufacturer, even if it is the first time that the
saw is used. Such limitations periods serve an important function by bringing
litigants into their attorneys' offices and into court at the earliest possible
time to ensure that evidence is preserved, that witnesses' recollections are
fresh, and that neither party is prejudiced by undue delay.
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