Let’s face it.  Cycling crashes can be catastrophic.  Whether you are riding a UCI Limit fifteen pound carbon fiber marvel or a thirty-five pound cruiser, you are no match for a quarter ton vehicle or – even worse — a three quarter ton truck or SUV.

Unfortunately, “might makes right” when a car, truck or SUV crashes into a cyclist.  The cyclist never wins that battle.  The results can be catastrophic.  A cyclist can face enormous medical bills, lost wages or lost time from work, and tremendous pain and suffering.  To add insult to (literally) injury, the driver of that vehicle may not be carrying auto liability insurance or only state minimum auto liability insurance coverage.  If you are hit in Kentucky or Ohio, those limits may only be $25,0000.  Unless you skinned your knee, $25,000 does not go far in this day and age.

Not to worry, you have Uninsured/Underinsured Motorist (UM/UIM) Coverage on your own auto policy to cover negligent drivers and irresponsible drivers who do not carry sufficient liability coverage, right?  Think Again.  You may have No Coverage at all for your cycling accident despite years of loyal premium payments to your automobile liability insurance carrier.

Whether you are entitled to UM or UIM Benefits under your policy following a vehicle-cyclist crash will be determined by four things:

(1) who is at fault and by how much (let’s face it, sometimes cyclists are at fault too);

(2) the State you purchased your UM/UIM policy;

(3) whether that UM/UIM policy is personal or commercial; and

(4) the language of that policy as the devil is always in the detail.

Who was at Fault?

Unlike a Medical Payments Provision in your Homeowners Policy or your Auto Policy, UM/UIM Benefits are not automatically paid just because you were in a crash.  This article will not address questions of fault or comparative fault of the cyclist.  Suffice it to say in most crashes, the motorist very rarely admit that they were responsible for causing the crash.  If that is the case, their, and potentially your own UM/UIM Insurance Carrier will likely “take their side.”  If an insurance company can avoid paying benefits, it will.  If an insurance company can delay making payments, it will. Despite humorous or reassuring ad campaigns, an insurance company is in the business of turning a profit for its shareholders.  Making payments to you under UM/UIM policies reduces the profits for its shareholders.  The same may hold true with regard to compensation paid to the employees who are charged with negotiating fair compensation for your injuries and damages.

Where Did You Purchase Your UM/UIM Policy?

If your crash occurred in the same State where you purchased your insurance, the initial question of what State’s law will apply is never at issue-because it is the same!  However, if you purchased your UM/UIM policy in one State, but your crash was in another State, “Choice of Law” questions will arise as to which State’s law will govern a court’s analysis of the policy.  If you find yourself in that situation, do not try to navigate those waters alone.  Get a lawyer!  Seasoned judges and lawyers struggle with Choice of Law analysis and there are literally hundreds of legal decisions across the country which have dealt with conflicting legal analysis between States on how UM/UIM policies should be interpreted and applied.

I am licensed in both Kentucky and Ohio and this article addresses both the Commonwealth of Kentucky’s and State of Ohio’s jurisprudence on UM/UIM Coverage.  The analysis is very different.  As explained below, a cyclist who purchased an UM/UIM policy in Kentucky and was injured in Kentucky will likely fare much better in recovering UM/UIM Benefits than a similarly situated cyclist in the State of Ohio.

Kentucky Jurisprudence on UM/UIM Coverage

Like most States, the provision of UM/UIM Coverage is governed by statute in Kentucky.  “UM” (Uninsured Coverage) is different than “UIM” (Underinsured Motorist Coverage) and Kentucky has one statute addressing each circumstance.

As the name would indicate, UM coverage responds where a motorist was “running bare” or driving with no insurance at all.  UIM coverage responds where the motorist was carrying state minimum limits or limits that are less than your UIM coverage limits.

KRS 304.20-020 governs UM coverage and states as follows:

(1) No automobile liability or motor vehicle liability policy of insurance insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in KRS 304.39-110 under provisions approved by the commissioner, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom; provided that any named insured shall have the right to reject in writing such coverage; and provided further that the rejection shall be valid for all insureds under the policy, and unless a named insured requests such coverage in writing, such coverage need not be provided in or supplemental to a renewal, reinstatement, substitute, replacement, or amended policy issued to the same named insured by the same insurer or any of its affiliates or subsidiaries.

 (2) For the purpose of this coverage the term “uninsured motor vehicle” shall, subject to the terms and conditions of such coverage, be deemed to include an insured motor vehicle where the liability insurer thereof is unable to make payment with respect to the legal liability of its insured within the limits specified therein because of insolvency; an insured motor vehicle with respect to which the amounts provided, under the bodily injury liability bond or insurance policy applicable at the time of the accident with respect to any person or organization legally responsible for the use of such motor vehicle, are less than the limits described in KRS 304.39-110; and an insured motor vehicle to the extent that the amounts provided in the liability coverage applicable at the time of the accident is denied by the insurer writing the same.

 (3) Protection against an insurer’s insolvency shall be applicable only to accidents occurring during a policy period in which its insured’s uninsured motorist coverage is in effect where the liability insurer of the tortfeasor becomes insolvent within one (1) year after such an accident. Nothing herein contained shall be construed to prevent any insurer from affording insolvency protection under terms and conditions more favorable to its insureds than is provided hereunder.

 (4) In the event of payment to any person under the coverage required by this section and subject to the terms and conditions of such coverage, the insurer making such payment shall, to the extent thereof, be entitled to the proceeds of any settlement or judgment resulting from the exercise of any rights of recovery of such person against any person or organization legally responsible for the bodily injury for which such payment is made, including the proceeds recoverable from the assets of the insolvent insurer.

In layperson’s terms, KRS 304.20-020 makes underinsured motorist coverage mandatory or automatic on any liability insurance purchased in Kentucky up to the state minimum coverage of $25,000. These means that if you did not go out and purchase additional UM coverage, you would have $25,000 in coverage available if you were struck by an uninsured driver.  The only exception to the mandatory nature of KRS 304.20-020 is where the injured cyclist had their own auto policy but declined or “rejected” UM coverage in writing.  Further, it should be noted that additional UM coverage above the $25,000 can be purchased by the cyclist, but it is not mandatory for the insurance company to offer it.

KRS 304.39-320 governs UIM coverage and states as follows:

(1) As used in this section, “underinsured motorist” means a party with motor vehicle liability insurance coverage in an amount less than a judgment recovered against that party for damages on account of injury due to a motor vehicle accident.

 (2) Every insurer shall make available upon request to its insureds underinsured motorist coverage, whereby subject to the terms and conditions of such coverage not inconsistent with this section the insurance company agrees to pay its own insured for such uncompensated damages as he may recover on account of injury due to a motor vehicle accident because the judgment recovered against the owner of the other vehicle exceeds the liability policy limits thereon, to the extent of the underinsurance policy limits on the vehicle of the party recovering.

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(5) The underinsured motorist insurer is entitled to a credit against total damages in the amount of the limits of the underinsured motorist’s liability policies in all cases to which this section applies, even if the settlement with the underinsured motorist under subsection (3) of this section or the payment by the underinsured motorist insurer under subsection (4) of this section is for less than the underinsured motorist’s full liability policy limits. The term “total damages” as used in this section means the full amount of damages determined to have been sustained by the injured party, regardless of the amount of underinsured motorist coverage. Nothing in this section, including any payment or credit under this subsection, reduces or affects the total amount of underinsured motorist coverage available to the injured party.

Unlike the $25,000 in mandatory UM coverage pursuant to KRS 304.20-020, UIM coverage is entirely optional in Kentucky: “Every insurer shall make available upon request to its insureds underinsured motorist coverage[.]”  The coverage must be requested.

Kentucky, like several other States, treats UM/UIM coverage as “personal” and “portable”, meaning your coverage follows you as the insured (“personal” to you) no matter what vehicle you are driving or in the case of a cyclist, what you are riding.  Per Judge Van Tatenhove in Foster v. American Fire & Casualty Co. (E.D. KY), 2015 WL 2097735 (E.D. KY), “Kentucky courts have long held that UIM coverage—precisely like UM coverage—is ‘personal to the insured … and is not connected to any particular vehicle.’ Sparks v. Trustguard Ins. Co., 389 S.W.3d 121, 126 (Ky.Ct.App.2012) (citing Dupin v. Adkins, 17 S.W.3d 538, 543 (Ky.Ct.App.2000)).”

“This means that UIM coverage follows an insured person as opposed to any particular vehicle (i.e., the policy covers each insured as a driver, a passenger, a pedestrian, or a bystander, whether inside or outside a vehicle).”  Pennington v. State Farm Mut. Auto. Ins., 553 F.3d 447 (6^th Cir. 2009).

Personally, I am partial to the Supreme Court of Hawaii’s (borrowed from the Supreme Court of Connecticut) elucidation of the personal nature of UM/UIM coverage:

[T]he following propositions are established elements of this state’s insurance law: UM insurance coverage is personal to the named insured * * * [and] a named insured, injured by an uninsured motorist from whom the named insured is legally entitled to recover damages, is entitled to UM coverage no matter where he or she is injured, whether the injury occurs while the named insured is (a) occupying an insured motor vehicle, (b) occupying an uninsured but owned motor vehicle, (c) occupying an unowned motor vehicle, (d) on a motorcycle, (e) on a bicycle, (f) on horseback, (g) on a pogo stick, (h) on foot, or (i) in a rocking chair on a front porch.

Dines v. Pacific Ins. Co., Ltd., 78 Hawai’i 325, 893 P.2d 176 (1995) (citations omitted);  but see, Bright v. First Ins. Co. of Hawaii Ltd., 91 Hawai’i 299 (Ct. App. 1999)(finding cyclist’s accident did not arise out of a “motor vehicle accident” and no-fault coverage did not apply).

Following this clear and straightforward reasoning, if a cyclist or a pogo stick-ist is injured by an uninsured or underinsured motorist, his or her personal UM/UIM policy will respond.  Period.  Full stop.  End of Story.  Unless you are in Ohio.  And unless you are claiming coverage under a commercial UM/UIM coverage.

Ohio Jurisprudence on UM/UIM Coverage

While not as strong or straightforward in its reasoning, the Ohio Supreme Court way back in 1994, reached a similar conclusion finding the “occupying” language in a UM policy invalid in Martin v. Midwestern Group Ins. Co.(1994), 70 Ohio St.3d 478.  The UM policy at issue in Martin required the insured to be “occupying” an automobile “listed” in the policy.  Because the injured insured was not in a car listed on his UM policy’s declaration page, his insurer, Midwestern Group, flatly refused to honor its obligations to pay UM benefits.  The Ohio Supreme Court found that the “occupying” requirement violated the then-current version of R.C. 3937.18 as UM coverage is designed to cover people, not cars:

Because we do not believe Hedrick is in accord with the law of our state, which is that uninsured motorist coverage was designed by the General Assembly to protect persons, not vehicles, we now expressly overrule it. If an insured is negligently injured by an uninsured motorist, he cannot be denied uninsured motorist coverage by a policy exclusion requiring that he be occupying an insured automobile under the policy.

Accordingly, we hold that an automobile liability insurance policy provision which eliminates uninsured motorist coverage for persons insured thereunder who are injured while occupying a motor vehicle owned by an insured, but not specifically listed in the policy, violates R.C. 3937.18 and is therefore invalid.

*** Pursuant to R.C. 3937.18(A)(1), such insurance must provide coverage “for bodily injury * * * for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles * * *.” The statute does not permit insurers to eliminate this required coverage on the basis that the injury was incurred in a vehicle not listed in the policy.

Martin, supra at 482.

Martin v. Midwestern Group was decided on October 5, 1994.  Shortly thereafter the Lobbyists were on the move.  Within 15 days Senate Bill 1994 S 20 was passed.  One must note the convenience and proximity of Ohio’s State House to many insurance companies headquartered in Columbus, Ohio.  For some Insurance Executives and/or Lobbyists, the Ohio State House is nothing more than a walk of a few blocks.

R.C. 3937.18 was amended no less than six times to reach the current version of Ohio’s “Uninsured and Underinsured Motorist Coverage Statute.  In 2008 the Supreme Court reversed the Martin holding finding that it had been superseded by the revisions to R.C. 3937.18 in Lager v. Miller-Gonzalez (2008), 120 Ohio St.3d 47.

The Ninth District Court of Appeals notes this reversal of fortune for Ohio insureds:

“It is important to note at the outset that the posture of this case is different than many other cases interpreting the term “occupying.” This is perhaps due in part to the fact that exclusions like the one in this policy were invalid under previous versions of R.C. 3937.18. See Martin v. Midwestern Group Ins. Co., 70 Ohio St.3d 478 (1994), paragraph three of the syllabus.  R.C. 3937.18(I) now permits this type of exclusion. See generally State Farm Mut. Auto. Ins. Co. v. Grace, 123 Ohio St.3d 471, 2009–Ohio–5934, ¶ 26–28.

Darno v. Davidson (9^th Dist. 2013), 2013-Ohio-4262 at ¶7.

The now-current version R.C. 3937.18 favors insurance companies in all sorts of ways.  Generally speaking, R.C. 3937.18(I) permits a laundry list of “exclusions” to coverage that permits insurance companies to deny UM/UIM benefits to premium-paying insureds in Ohio.

Specific to cyclists, R.C. 3937.18(I)(4) legislatively destroys the personal and portable nature of UM/UIM coverage recognized by Kentucky Courts and other States.  Subsection (I)(4) permits an insurer to limit UM/UIM coverage to “covered” vehicles which are specifically listed in the declarations page of your policy.

How many of you have listed your bicycles as “covered” vehicles in your UM/UIM coverage?  I suspect before reading this, you never gave the issue a moment’s consideration.  R.C. 3937.18(I)(4) is a trap for the unwary. It states:

(I) Any policy of insurance that includes uninsured motorist coverage, underinsured motorist coverage, or both uninsured and underinsured motorist coverages may, * * *  include terms and conditions that preclude coverage for bodily injury or death suffered by an insured under specified circumstances, including but not limited to any of the following circumstances:

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(4) While any employee, officer, director, partner, trustee, member, executor, administrator, or beneficiary of the named insured, or any relative of any such person, is operating or occupying a motor vehicle, unless [said person] is operating or occupying a motor vehicle for which uninsured motorist coverage, underinsured motorist coverage, or both uninsured and underinsured motorist coverages are provided in the policy;

Where does this leave a cyclist in Ohio?  In short, without any legislative protection.  Your insurance company can avail itself of this Statute and argue (if the policy language permits) that (1) you were on a bicycle, not a “motor vehicle” and (2) your bike was not “covered” because it was not listed or “provided” for in the policy.

This result is exactly what Ohio legislators intended when they wrote into law the following language: “Any policy of insurance that includes uninsured motorist coverage, underinsured motorist coverage, or both uninsured and underinsured motorist coverages may, * * *  include terms and conditions that preclude coverage for bodily injury” found in R.C. 3937.18.

In fact, Ohio legislators were so anxious to restrict UM and UIM coverage that they wrote into law their approval of UM and UIM policies which restrict coverage to certain motor vehicles in subsection (I)(4) of R.C. 3937.18.  This is in sharp contrast to the “personal” and “portable” nature of UM and UIM coverage found in the Commonwealth of Kentucky.

Individual/Personal Policies Versus Commercial Policies

Courts will take a much different approach to commercial UM and UIM policies as compared to personal UM and UIM policies. Commercial UM and UIM policies typically insure the interests of a business or some type of corporate entity.  It is difficult for a business or corporation to have a “personal” interest in the insurance as a business or corporation is, by definition, a grouping of several to potentially thousands of individuals.

The Supreme Court of Kentucky was faced with a UIM claim brought by a cyclist in Isaacs v. Sentinal Insurance Company Ltd., 2018-SC-0078-DG.  Mr. Isaacs was an attorney and the sole shareholder of his law firm Isaacs & Isaacs, P.S.C.  Mr. Isaacs was hit and injured while riding in Jefferson County.  The driver’s insurance company paid the limits of his policy to Mr. Isaacs leaving a UIM Claim against Sentinal.

The Kentucky Supreme Court addressed the sole shareholder argument that Mr. Isaacs and his law firm where one in the same thusly:

Professional service corporations are—as the name implies—corporate entities. KRS 274.015(2) provides: “A professional service corporation formed under the provisions of this chapter, except as this chapter may otherwise provide, shall have the same powers, authority, duties, and liabilities as a corporation formed under, and shall be otherwise governed by, KRS Chapter 271B.” If Isaacs and his P.S.C. were, as he argues, one and the same, he would have had no reason to form the P.S.C.

The Kentucky Supreme Court went on to find that an agent of a corporation cannot have a “personal” relationship to the UIM coverage unless he was listed as a named insured on the policy:

The Isaacses also argue they are entitled to UIM benefits under the Sentinel commercial policy because “UIM coverage is personal to the person who purchased the coverage.” However, as previously discussed, Isaacs was not the named insured. He did not purchase the coverage, nor did his name appear on the policy’s declarations page. The policy’s terms unambiguously distinguished between policies written to individuals and those written to corporations.

Absent a personal interest as a named insured, the Supreme Court applied the “covered auto” exclusion discussed above the Ohio subsection and found that the UIM coverage did not apply because Mr. Isaacs was riding a bicycle at the time of the accident and that bicycle was not listed as a “covered” vehicle or “covered auto” and therefore coverage under the policy was not triggered.

There is no reason to believe that a commercial UM/UIM policy written and litigated in Ohio would come to a different conclusion.

Lessons Learned

The first, and most obvious, lesson learned is get UM and UIM Coverage!

The second lesson learned is that the protections afforded an insured cyclist in Kentucky are much, much broader than the protections afforded insured cyclists in Ohio under UM and UIM policies.

The third lesson learned is that the devil is in the detail.  Make sure your policy does not include language like “covered auto” or “occupying” in the UM or UIM policy.  This is an argument for an Insurance Agent.  Sit down with your agent and let them know you are a cyclist, and you need UM and UIM coverage for while you are on the road enjoying one of your passions.

The fourth lesson learned is that personal and commercial UM and UIM policies are treated differently under both Kentucky and Ohio law.

The fifth lesson learned is that negotiating an UM or UIM Claim can be perilous.  Secure Counsel.

If you have any questions or concerns regarding UM or UIM coverage or a potential first-party claim against your automobile insurance company after a cycling accident, please reach out to us at Carville Legal Counsel LLC.  You can email Chris Carville at [email protected] or call 513 600 8432.  We offer free consultations.