The insured’s daughter was operating a motorcycle and was struck by a vehicle operated by a postal worker. His carrier paid its policy limit of $25,000. The United States also paid $49,900 in exchange for a release of all claims against the federal government, its agents and employees. Plaintiff then made a UIM claim against her policy which had $100,000 limits. The UIM carrier believed it was entitled to a setoff of $74,900 while the insured claimed only $25,000 should be credited against the UIM limits. The trial court ruled in favor of the insured.

The Fifth District affirmed. It held the UIM carrier could not deduct the $49,900 paid by the United States to extinguish its liability. The insured paid premiums for $100,000 worth of coverage and to allow the carrier to reduce its own liability would frustrate the public policy of placing the insured in the same position as if the adverse driver had higher limits. DeStefano v. Farmers Automobile Ins. Ass’n, 2016 IL App (5th) 150325.