Part 3 of this Blog Series on Uninsured and Underinsured Motorist Coverage merits both Trigger Warnings and Apologies!!! But not for the same reason.
Trigger Warning – Politics
The Trigger Warning is a Heads-Up that I am going to talk a bit of politics. Not Democrat versus Republican politics, but rather the enduring and age-old question of the role of the government in contracting – especially where one side is a multibillion-dollar company and on the other side is a mother or father with a full-time job (who probably don’t have a law degree) and kids that need to get back and forth from school and soccer practice. I would humbly suggest that one side has a bit more time and resources to devote to drafting the insuring agreement. There are definitely consequences to that lopsided negotiation when a cyclist or pedestrian is struck has to make a UM or UIM Claim against this/her insurer. A careless motorist may compound his or her carelessness by carrying only the state-minimum insurance coverage or no insurance. That carelessness and irresponsibility become your problem if you don’t have UM/UIM coverage.
The Apology is for over 3500 words and virtual ink spilled over two blog articles on the history of Ohio’s Uninsured Motorist and Underinsured Motorist Statute, Revised Code 3937.18 and legislative amendments over the past two decades. Legislation can be boring. Tracking legislative changes over time is even more so. But, I did not want you to have to just take my word for it when I say, of the last fifteen amendments to R.C. 3937.18, nine of those changes benefitted insurance companies, five were arguably neutral, and only one of those fifteen amendments was pro-citizen! If I took a more paternalistic view of the changes, the insurance companies would have nearly run the table with a score of 14 to 1.
Again, picking up on a trend here? Your elected officials HAVE NOT BEEN YOUR ADVOCATES in recrafting UM/UIM legislation. In fact, they have been just the opposite, the legislative changes overwhelmingly favor multibillion-dollar insurance companies’ interests over the interests of the citizens who cast votes to elect them.
Back to Politics
Back to politics (without labels). Traffic accidents take a toll on society. Per the United States National Highway Traffic Safety Administration, in 2017, for the ninth consecutive year, motor vehicle traffic crashes were not among the top 10 causes of death in the United States. Motor vehicle crashes were the 13th leading cause of death overall among all causes in both 2016 and 2017. Motor vehicle traffic crashes were the leading cause of death for ages 3, 11, 12, and 17 to 21 in 2017. In 2016 motor vehicle traffic crashes were the leading cause of death for ages 10, 11, and 17 to 22. When motor vehicle traffic crashes were ranked within unintentional injury deaths, they were the second leading cause of death during both 2016 and 2017. They were the leading cause of unintentional injury death for ages 3 to 21 in 2017. In 2016 motor vehicle traffic crashes were the leading cause of intentional injury death for ages 3 to 22, and 65 and 66. Assessing by another measure, the years of life lost (i.e., the number of years people were expected to live had they not died), motor vehicle traffic crashes ranked 7th in 2016 and 2017 as it has been ranked since 2011.
So, one could argue that “the government” has a role in mitigating these social costs through insurance coverage. Hence, the birth of mandatory minimum automobile coverage in all but two states. The “State” mandates that you must do the socially responsible thing and carry insurance to cover the damage you may cause another citizen from a moment’s inattention behind the wheel. We know that that some citizens are going to “run bare” and just not incur the cost of that insurance. Hence the need for UM/UIM coverage. Nationally and in Ohio, roughly 13% of motorists are uninsured. UM/UIM coverage fills that gap right? NOT NECESSARILY.
Back in 1988 when Ohio enacted its UM/UIM statute it regulated insurance companies by requiring a certain strength of coverage. It should have been a win-win for citizens and insurance companies. Mandatory coverage means mandatory premiums and more premiums should lead to more profits for insurance companies.
Fast forward from 1988 to 2001 and we see a steady erosion of the regulatory protection afforded Ohio citizens under their UM/UIM coverages. This erosion is especially acute for pedestrians and cyclists – THE MOST VULNERABLE USERS OF OHIO’S ROADWAYS.
Do Pedestrians and Cyclists “Occupy” “Covered Autos”?
When was the last time you read your automobile liability policy? Never? I thought so. An insurance policy is conceptually a three-ring binder of documents. Behind the first tab you have the insuring agreement which is typically very short. Behind the second tab you have exclusions which are typically a long list of conduct or circumstances where the coverage you paid for is excluded. And behind the third tab is a list of endorsements that restore or modify the coverage provided by the insuring agreement or excluded by an “exclusion.”
I have noted a disturbing trend in the language of the insuring agreement for UM/UIM coverage. Once upon a time, an insured was simply defined as “you” (the guy or gal who paid for the insurance), or “a family member”, sometimes described as “a relative.”
An example of the “old” definition of an insured:
I have seen this straightforward definition get subtlety, but significantly modified to read:
Did you see the change? The old 1, 2, 3 got a precondition to coverage. Instead of covering “you”, the policy purports to cover “you” IF you were in a “covered auto.”
Here is a typical “covered auto” definition:
Do you see “bike,” “bicycle,” or “pedestrian” in there?
I am not offering specific legal advice here or suggesting that coverage for a bike crash or pedestrian impact would not be covered if your Ohio policy had this language. Steve Magas and I are litigating this very issue on a commercial policy as I write this article.
I am suggesting that “covered auto” language in your UM/UIM Policy is not helpful to Ohio cyclists and pedestrians.
However, there is nothing in R.C. 3937.18 that prevents an insurer from including this very subtle change. The Tenth District has noted as much:
“[W] hile the General Assembly removed from the statute preconditions or preclusions to coverage, * * * it expressly left to the contracting parties to agree upon any ‘terms and conditions that preclude coverage for bodily injury or death suffered by an insured under specified circumstances.’ The fact that the legislature removed its own ‘terms and conditions that preclude coverage’ from the statute does not mean that no such terms and conditions are permitted to be placed in policies with UM coverage. Rather, R.C. 3937.18(I) reveals that the legislature sought to ‘deregulate’ such policies, leaving to the parties whether any preconditions or exclusions to coverage will govern their relationship.”
Snyder v. Am. Family Ins. Co. [(10th Dist. 2005)], 2005-Ohio-6751, at ¶ 22.
Stated differently, “the General Assembly expressly left it to [a multibillion-dollar insurance company on one side and a busy Soccer Mom on the other side] to agree upon any terms and conditions that preclude coverage.”
These insurance companies will not have your interests as a cyclist or pedestrian front and center in the event of a catastrophic injury. Every dollar an insurance company pays you on a UM/UIM claim is one less dollar of profit at the end of the financial year. They will be looking for reasons to avoid UM/UIM coverage and consequent payment in the event of a crash.
Hit and Run Victim? Think You are Covered? Think Again.
Did you know that your UM/UIM policy may have a provision limiting your ability to recover if a drunk driver hits you while cycling, running or walking and that driver flees the scene? Well to (literally) add insult to injury your insurance company will very likely make it harder to recovery UM/UIM benefits because YOUR WORD IS NOT GOOD ENOUGH. Most insurance companies start from the default position that you are a liar and require additional burdens to prove your hit-and-run case because you are a liar.
Here is an example:
The foregoing policy requires “additional evidence” (because you are probably a liar). Other policies will require “independent corroborative evidence” (again because you are probably a liar).
In 2016 the Ohio Supreme Court interpreted the “corroborative” policy language, which tracked R.C. 3937.18(B)(3), in Smith v. Erie Ins. Co. (2016), 148 Ohio St.3d 192 and held “that the contract’s requirement of independent corroborative evidence can be met using evidence derived from the insured’s testimony.” Id. at 193. In Smith, the Majority pointed to the 911 Call, the diagram of the Trooper, and the plaintiff’s medical and therapy reports as evidence satisfying the independent corroborative evidence test – despite the fact that all of the foregoing evidence was derivative of the Plaintiff’s testimony.
This article only touched on two significant deregulated issues: (1) the definition of an insured in a UM/UIM policy and (2) hit-and-run accidents. There are more examples to be discussed, but these two are the most significant in my mind when discussing deregulation of UM/UIM coverage and the impact on cyclists and pedestrians in Ohio.
I suggest the following takeaways. Your insurance company had a team of lawyers write your UM/UIM coverage. He or she did not write that policy with your interests in mind. Maybe you should have a lawyer review your coverage before an accident, not after. Recall, “the General Assembly expressly left it to [a multibillion-dollar insurance company on one side and a busy Soccer Mom on the other side] to agree upon any terms and conditions that preclude coverage.”
With regard to hit-and-run accidents, always report the accident to the police and secure witness statements. Consider riding with front-facing and rear-facing cameras like those from Cycliq (I had to buy my own – no sponsorship deal). Video will be the “independent” or “additional evidence” to support your hit-and-run claim. Finally, secure a lawyer. Your Insurance Company is going to know the policy and claim process better than you. Hopefully, a crash is a once-in-a-lifetime event for you. Insurance companies deal with crashes 24 hours a day, 7 days a week. They have had a lot of practice.
Finally, and at a minimum, look at your policy. Do the words “covered auto” appear? Also, have an annual sit down with your insurance agent and make sure that agent understanding you are a cyclist and you need coverage for when you are out on your bicycle. You should be making an informed decision about your UM/UIM coverage. You should also consider umbrella coverage which ties back to your UM/UIM coverage. My friend and colleague Steve Magas has recently written on this issue. Your umbrella coverage may not provide the coverage you think it does.
If you have any questions or comments, I can be reached at [email protected] or 513 600 8432 or 859 380 8309.