Check Your Policy Now: Why Suing Your Agent Over Missing UM/UIM Coverage Can Be Too Late

Published January 25, 2012 · Ohio Appeals Courts

Most people buy car insurance by telling an agent they want "full coverage" and trusting the agent to fill in the details. A Greene County woman did exactly that. When another driver hit her and turned out to carry only the state minimum, she discovered her policy had no uninsured or underinsured motorist coverage at all. She sued her agent. On January 6, 2012, the Second District Court of Appeals, which hears appeals from Montgomery, Greene, Miami, and surrounding counties, ruled that her lawsuit was filed too late, even though the deadline had expired before she was ever hurt.

The crash and the missing coverage

The case is Auckerman v. Rogers, 2012-Ohio-23 (2d Dist.). Virginia Auckerman bought her auto policy through agent Steve Rogers on June 6, 2005. According to her complaint, she asked for full coverage on her vehicles. The policy she received did not include UM/UIM coverage, the protection that pays you from your own policy when the at-fault driver has no insurance or not enough of it. I explained how that coverage works in an earlier post on UM/UIM basics.

On February 28, 2008, another driver struck Ms. Auckerman's car. She claimed damages of $37,500. The negligent driver carried only $12,500 in liability coverage, which is Ohio's minimum. That left Ms. Auckerman $25,000 short, and with no UM/UIM coverage on her own policy, nowhere else to turn. On August 19, 2010, she sued her agent for failing to provide the coverage she had asked for.

The four-year deadline that ran before the crash

Claims against an insurance agent for failing to obtain requested coverage, which lawyers call "negligent procurement," are treated as professional negligence claims. They are governed by the four-year statute of limitations in R.C. 2305.09, not the two-year deadline that applies to the injury claim itself.

The question in Auckerman was when those four years started. Ms. Auckerman argued the clock began on the day of the crash, because that was the first time the missing coverage actually cost her anything. She relied on a 1982 Ohio Supreme Court decision that had applied exactly that rule to an insurance agent.

The Second District disagreed. It relied on the Supreme Court's 2011 decision in Flagstar Bank v. Airline Union's Mtge. Co., which held that a professional negligence claim under R.C. 2305.09 accrues on the date the negligent act is committed, not when it later causes damage. The court saw no principled reason to treat an insurance agent differently from the appraiser in Flagstar. So the clock on Ms. Auckerman's claim started on June 6, 2005, the day she got the policy, and expired on June 6, 2009.

The court did point out that Ms. Auckerman still had more than fifteen months after her February 2008 crash to file before that deadline passed. But if the crash had happened a year and a half later, her claim against the agent would have been dead before she ever had a reason to bring it.

A court divided

This was not a unanimous panel, and the judges' separate opinions show how troubling the rule is. Judge Fain concurred because he believed Flagstar required the result, but he wrote separately to lament it. He observed that he was taught in law school that injury is an element of every tort, and that under the rule applied here, "a tort can be born, grow old, and die, before producing an injury." Judge Grady dissented outright, arguing that an agent's failure to deliver the requested coverage does not become a civil wrong until the insured is actually harmed by it.

Those are serious objections from serious judges. But the majority's holding is the law in our district today, and it is the rule you need to plan around.

Why this matters to every driver in the Dayton area

This decision takes a bad situation and makes it worse. Ohio's minimum liability limits are low. A driver carrying the $12,500 minimum cannot come close to paying for a hospital stay, surgery, or months of lost wages. Your own UM/UIM coverage is what fills that gap. As I explained in my post on the three-year UM/UIM deadline, that coverage already comes with its own traps. Auckerman adds another one, and it is a trap that springs before you even know you are in it.

Here is the uncomfortable reality. If your agent left UM/UIM off your policy four years ago and you have never looked, your claim against that agent may already be gone. The only way to protect yourself is to find out now, before a crash, whether the coverage is there.

What this means for you

• Pull out your declarations page today. It is the one- or two-page summary at the front of your policy. Look for "Uninsured Motorist" and "Underinsured Motorist" coverage with dollar limits next to them. If you do not see those lines, call your agent and get them added.
• Match your UM/UIM limits to your liability limits. Buying $100,000 in liability coverage to protect others but only the minimum in UM/UIM to protect yourself gets the priorities backward. UM/UIM coverage is among the least expensive protection you can buy for what it does.
• Do not rely on the phrase "full coverage." Ms. Auckerman asked for full coverage and did not get UM/UIM. Ask for it by name, and confirm in writing that it is on the policy.
• If you already have a crash and the coverage is missing, act fast. A claim against the agent has to be filed within four years of the date the policy was issued or renewed without the coverage. Do not assume you have four years from the crash. Call a lawyer immediately so the dates can be worked out.
• Remember the claim against the at-fault driver is separate. That claim still carries the two-year deadline, and the driver's $12,500 policy is still collectible. A lawyer can also look for other coverage: other policies in your household, an umbrella policy, or a commercial policy if the other driver was working.

A free policy review

Because of this decision, our office will review your auto insurance declarations page at no charge, whether or not you have been in a crash. Bring it in or email it to us. We will tell you whether you have UM/UIM coverage, whether the limits make sense for your family, and what to ask your agent to change. It takes a few minutes and it can be the difference between a fully paid claim and a $25,000 shortfall like the one in Auckerman. You can read more about how we handle uninsured and underinsured motorist claims across the Dayton area.