History Lessons in Uninsured and Underinsured Motorist Coverage for Ohio Cyclists – Part 1

It has been a few weeks since I posted a blog. I have been busy preparing materials for multiple educational seminars on insurance coverage matters that I give to other attorneys in the summer months. Much of that information may be of interest to the average cyclist. In previous blog articles, I compared and contrasted Ohio and Kentucky uninsured and underinsured motorist (“UM/UIM” herein) laws. This blog takes some of that lecture material I have been preparing for an attorney education audience and tailors (or attempts to tailor) that material to a cycling audience.

This next series of blogs will take a deep dive into the history of Ohio UM/UIM law in an effort to explain how we have gotten to where we are now in Ohio. For those of you who hang in there, in my final blog of this series, I will provide some general observations that you can take to your insurance agent during an annual renewal.

A BIG disclaimer here! I am NOT OFFERING PARTICULAR LEGAL ADVICE. Every person’s situation may vary and the observations that follow are general in nature. However, you can direct any specific questions to me directly at [email protected].

Getting that CYA out of the way, one must ask why do we have laws requiring insurance in the first place? In 1927 Massachusetts became the first state to require the purchase of auto liability insurance. Since then 48 states and the District of Columbia have followed suit. Which leaves Virginia and New Hampshire as the only states without compulsory auto liability laws.
Such laws usually have the support of the public as anyone could be the victim of a crash with an uninsured driver. As set forth below, compliance with such laws is generally poor and enforcement activities are costly and not effective when one considers that the minimums are just that – a minimum.

Currently, only two states have $50,000.00 minimums – Maine and Alaska. The minimums drop off to $30,000.00 or $25,000.00 for most of the remaining 26 states. Curiously, California is among the four states having the lowest limits of $15,000.00. Louisiana, New Jersey, and Pennsylvania round out the $15,000.00 Club.
Anyone who has litigated a personal injury case with more than a sprain/strain injury knows that $15,000.00, or even $25,000.00 will not likely provide sufficient coverage. So the risk of a crash with an underinsured motorist can leave a coverage gap for an insured or insufficient coverage for an injured plaintiff.
Per the Insurance Information Institute, it is estimated that Mississippi is the state with the highest number of uninsured motorists and New Jersey has the lowest percentage of uninsured motorists as of 2019.

The Insurance Information Institute ranked Ohio as the 21st state in uninsured motorists with an estimated 13% of motorists driving without insurance through 2019. That same study put the national average at 12.6% so Ohio is very much in line with the overall estimate of uninsured motorists on its highways and byways.

R.C. 3937.18 was amended no less than six times between 1994 and 2013 to reach the current version of Ohio’s Uninsured and Underinsured Motorist Coverage Statute. This blog will focus on eight significant amendments that occurred in 1994 and 1997. The amendments which occurred in 2001 will be addressed in a separate blog.

1994 Change #1: No Intrafamily Stacking

Subsection (G) was amended in 1994 as follows:

1994 Change #2: Single Limit/Single Claim for UM/UIM Coverage

A new R.C. 3937.18(H) was added in 1994 as follows:

Taken together, these 1994 amendments will limit an injured cyclist, assuming there is coverage in the first instance, to a single maximum pot of money under the policy.  For example, if your UM/UIM Policy has a limit of $500,000.00.  That will be the maximum recovery regardless of the number of family members insured under the policy and regardless of the number of family members (or other insureds) who were involved in the accident with an uninsured or underinsured driver.

1997 Change #1: Return of Immunity?

R.C. 3937.18(A)(1) was amended in 1997 as follows:

“It is obvious from a reading of the [prior version of the] statute that the insured must be an entity capable of collecting from an uninsured. The city, in the instant cause, is cloaked with immunity, and, therefore, the [insureds] are not legally entitled to recover damages from the city. It is the legal defense, and not the status of insurance, that warrants our decision herein. The uninsured motorist coverage is to apply only in those situations in which the ‘lack of liability insurance’ is the reason the claim goes uncompensated, and not when the claim goes uncompensated because of the lack of liability due to the substantive laws of Ohio.” Middleton v. State Farm Mut. Automobile Ins. Co. (12th Dist.), 1997 WL 716885, *4.

In Kearns v. Permanent Gen. Assur. Corp. of Ohio (4th Dist.), 1998 WL 761679, the Fourth District recognized the change in the plain language of the statute: “’The version of R.C. 3937.18(A)(1) in effect on October 20, 1994 clearly states that ‘[t]he fact that the owner or operator of the uninsured motor vehicle has an immunity, whether based upon a statute or the common law, that could be raised as a defense in an action brought against him by the person insured under uninsured motorist coverage does not affect the insured person’s right to recover under his uninsured motorist coverage.’ The footnote in Fahnbulleh[v. Strahan (1995), Ohio St.3d 666] accords with the clear language of the statute. Although appellate cases decided after October 20, 1994 effective date of the statute have continued to follow Kurent, none of those cases involved insurance policies written after October 20, 1994 or accidents that occurred after that date.3 For the above reasons, we find that Kurent does not control the outcome in the case sub judice.’” The footnote in Fahnbulleh referenced above read: “The General Assembly amended R.C. 3937.18(A)(1) in Am.Sub.S.B. No. 20, effective October 20, 1994, which mandates that an insurance carrier honor uninsured motorists coverage to insureds regardless of whether the alleged tortfeasor claims immunity. Accordingly, the General Assembly has resolved the issue raised in this cause. Hereafter, injured persons may recover from their insurance carriers if injured by a tortfeasor who is immune from liability.” Fahnbulleh, supra at fn 1.

It is a good thing that immunity does not bar an uninsured/underinsured motorist claim.  This was a good amendment that protects Ohio cyclists from getting zeroed out on an uninsured/underinsured motorist claim, just because the other party could claim some variety of immunity.

If you are keeping track, the amendment score is 2 to 1 in favor of amendments that benefit Ohio insurers rather than Ohio insureds/citizens/cyclists.

Let’s take a look at 1997 and continue compiling the scorecard.

1997 Change #2: UM/UIM Limits Lower Than Auto Limits

The 1997 Amendments also permitted UM/UIM limits lower than limits provided by the automobile liability policy provided those limits are not less than $25,000.00 pursuant to R.C. 4509.20. R.C. 3937.18(2)(C) was amended to state:

This amendment modified previous requirements that UM/UIM coverage had to match liability (to third parties) limits.  The previous requirement made sense from a risk-allocation perspective.  If you wanted 300,000 or 500,000 dollars worth of protection from claims by third parties if you caused the accident, it stood to reason that you would want the same coverage limits if someone caused an accident in which you were injured for no fault of your own.

The foregoing amendment allowed insurers to offer UM/UIM limits for presumably lower premiums.

I would score this a neutral change.  I would not recommend it, but if you wanted to save a couple of nickels on UM/UIM premium, then you can face the consequences of insufficient coverage should you suffer a catastrophic injury in a cycling accident.  One should be free to contract away protection for less premium.

1997 Change #3: Insured Can Reject UM/UIM Coverage in Writing

R.C. 3937.18(2)(C) was further amended to permit rejection of UM/UIM coverage, provided that rejection was in writing:

If there was a written rejection, an insurer is not obligated to offer UM/UIM coverage at renewal:

One of the attractive elements of UM/UIM coverage in Ohio prior to 1997 was that it was automatic, in the sense that insurers had to offer it.  The foregoing 1997 change opened the door to rejecting coverage.  I think it is a good thing to alert consumers of the consequences of their cost-savings decisions by requiring a signature or written waiver of their right to UM/UIM coverage.

Again, I would score this a neutral change.  One should be free to contract away protection for less premium.

1997 Change #4: Insured’s Testimony Is Not Good Enough to Prove Causation Where Uninsured Driver is Unknown

The Ohio Legislature attempted to make the testimony of the policyholder inadmissible to prove an accident was caused by an unidentified driver. R.C. 3937.18(D) was amended to state:

The foregoing change would undoubtedly score as a pro-insurance company change.  The Ohio Legislature stepped into the evidentiary process of a trial and tipped the scales in favor of Ohio insurers.  This is a particularly onerous change given the rise of hit-and-run cycling accidents in Ohio.  This is a baffling change to UM/UIM law.  This is unquestionably an anti-citizen, anti-cyclist, anti-pedestrian, and singularly pro-insurance company amendment to Ohio law.

1997 Change #5: Subsection (J) Is Added Permitting Exclusions

R.C. 3937.18(J) was added to permit additional exclusions to UM/UIM Coverage:

It should be noted that R.C. 3937.18(J) above, now R.C. 3937.18(I) has continued to this day with only one minor change in 2013 to harmonize this subsection with R.C. 3937.46 which was enacted in the same year as discussed below. However, this was a seismic shift in Ohio UM/UIM jurisprudence. UM/UIM coverage was no longer personal to the insured.  This, as explained below, and in more practical detail in the final blog article of this series of articles, is uniquely problematic for Ohio cyclists and pedestrians.

The Ohio Supreme Court way back in 1994, found “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, 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. In 2008 the Supreme Court reversed the Martin holding finding that it had been superseded by the revisions to R.C. 3937.18 discussed above in Lager v. Miller-Gonzalez (2008), 120 Ohio St.3d 47.

The Ninth District Court of Appeals noted 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 (9th Dist. 2013), 2013-Ohio-4262 at ¶7.

This is in sharp contrast to the “personal” and “portable” nature of UM and UIM coverage found, for example, directly across the Ohio River in the Commonwealth of Kentucky. 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 (6th Cir. 2009).

The Supreme Court of Hawaii’s (borrowed from the Supreme Court of Connecticut) elucidation leaves no question regarding 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).

Underpinning this change was a legislative and judicial philosophy that insurers and insureds freely contract with equal levels of sophistication. “[I]nsurance companies and their customers are free to contract in any manner that they see fit. Insurers are not required by law to offer UM/UIM coverage. However, if insurers opt to offer UM/UIM coverage, they are free to include exclusions or limitations on that coverage.” Green v. Westfield Natl. Ins. Co. (9th Dist.), 2006-Ohio-5057, ¶ 20.  One must ask oneself how many times they have sat down on one side of the negotiating table and hammered out the terms of their auto or homeowner coverage with their insurance company on the other side of the table.  These legislative and judicial philosophies are just not realistic and do not pass the “reasonable expectations test” adopted in many jurisdictions outside of Ohio.

Like 1997 Change #4 above, change #5 would undoubtedly score as a pro-insurance company change.

1997 Change #6: Subsection (K) Refines the Definition of an Uninsured Motorist

R.C. 3937.18(K) was added to further refine the definition of an Uninsured Motorist:

This change would not directly affect Ohio cyclists and pedestrians.  Regardless, I would score this change as pro-insurer as it narrows the circumstances under which an injured insured could make a claim.

In the final tally, I would score the eight 1994 and 1997 amendments as 5 pro insurance companies, 1 pro citizen, and 2 neutral.  Next week we will analyze the 2000 and 2001 amendments.

In the interim, you can direct any questions or comments to the author at [email protected] or by phone at 513 600 8432 or 859 380 8309.