American Family Mutual Insurance Co. v. KropAnnotate this Case
American Family filed a declaratory judgment action against Walter and Lisa Krop, contending their homeowner's insurance policy did not cover a tort action pending against their son. The Krops filed a counterclaim against American Family and a third-party claim against Andrew Varga, an insurance agent for American Family. The appellate court reversed the circuit court's dismissal of the Krops' claims as untimely.
The Supreme Court of Illinois held that when customers have the opportunity to read their insurance policy and can reasonably be expected to understand its terms, the cause of action for negligent failure to procure insurance accrues as soon as the customers receive the policy. In this case, the complaint was filed over two years after the Krops received their policy and the complaint failed to plead facts that would support any recognized exception to the expectation that customers will read the policy and understand its terms. Therefore, their claim was untimely and the court reversed the appellate court's decision.