Ohio's Minimum Auto Insurance Doubled on December 22, 2013: Why It's Still Not Enough to Protect You

Published December 23, 2013 · New Laws

For 44 years, an Ohio driver could satisfy the state's financial-responsibility law with a policy that paid a maximum of $12,500 to any one person he injured. That figure was set in 1969, when a new car cost about $3,000 and a night in the hospital cost less than a tank of gas does today. It was, by most accounts, the lowest minimum in the country. As of yesterday, December 22, 2013, it is gone. Amended Substitute House Bill 278, passed by the 129th General Assembly and signed by Governor Kasich in December 2012, has taken effect and doubled Ohio's minimum liability limits.

That is good news for people hurt in crashes. It is also far less protection than most people assume, and this post is about the gap.

What changed

R.C. 4509.51 sets the minimum limits an owner's liability policy must carry. Under the amended statute, every policy must provide at least:

• $25,000 for bodily injury to or death of one person in any one accident (previously $12,500);
• $50,000 for bodily injury to or death of two or more persons in any one accident (previously $25,000); and
• $25,000 for damage to the property of others in any one accident (previously $7,500).

Insurance professionals call this "25/50/25." The new minimums apply to policies issued or renewed on or after December 22, 2013, so a driver who renewed in November may still carry the old limits until the next renewal. Reports from the insurance industry indicate that most Ohio drivers already carried more than the old minimum, but a meaningful number did not, and those are the drivers who tend to cause serious crashes.

Why 25/50 is still not enough

Think about what a serious injury actually costs in the Dayton area. An ambulance ride and an emergency-room evaluation with imaging can approach $10,000 before anyone is admitted. A fractured femur with surgical repair and a hospital stay runs well into five figures. A spinal fusion, a traumatic brain injury requiring rehabilitation, or a month in intensive care can exceed $100,000 in billed charges alone, before a single dollar of lost wages or any compensation for pain, limitation, and permanent impairment.

Against those numbers, $25,000 is exhausted in the first days. Under the old law, $12,500 was often exhausted in the emergency room. Doubling the minimum helps the person with a moderate injury. It does little for the person with a life-changing one.

The per-accident limit tells the same story. If a minimum-limits driver crosses the center line and injures a family of four, the entire policy is $50,000, to be shared among all four. The new limit is better than $25,000 shared four ways, which is what the law allowed last week, but it does not approach the real losses in a multi-victim crash.

Where the money comes from when the at-fault driver is underinsured

When the at-fault driver's policy is too small, three sources matter most, and all three depend on decisions you make before the crash.

Your own underinsured motorist coverage. UIM coverage, governed by R.C. 3937.18, pays you the difference between the at-fault driver's limits and your own UIM limits, up to your limits, when your damages exceed what the other driver carries. If you carry $250,000 in UIM coverage and a 25/50 driver seriously injures you, your own insurer stands behind the at-fault driver for up to an additional $225,000. We explained the basics in our post on what UM and UIM coverage is and why every Ohio driver needs it, and our UM/UIM claims page walks through how the claim is made.

Ohio does not require insurers to include UM/UIM coverage, and it does not require you to buy it. Many drivers decline it to save a few dollars a month, or carry UIM limits that match a low liability limit. H.B. 278 does nothing to change that. If your own UIM limits are 25/50, the new law has not improved your protection at all.

Your own uninsured motorist coverage. The same coverage responds when the at-fault driver has no insurance or flees the scene. Raising the minimum limits does not put insurance in the cars of people who never bought it, and hit-and-run drivers by definition are not identified. Our page on hit-and-run and uninsured drivers explains that claim.

Umbrella coverage and other policies. Household umbrella policies sometimes, but not always, include UM/UIM. Other vehicles in the household, a policy on the car you were riding in, and, for people hurt while working, an employer's commercial policy can all come into play. Finding every policy is part of every serious case we handle.

Deadlines you should know now

UM/UIM claims carry their own clock. R.C. 3937.18 allows insurers to require that a UM/UIM claim be made or suit filed within three years of the crash, and most policies do. We wrote about the three-year UM/UIM trap two years ago; it has caught more than one person who waited for the at-fault driver's claim to resolve first. When the at-fault driver carries minimum limits, the underinsured claim should be anticipated from the beginning, and your own insurer should be put on notice early.

What we recommend

This is the one place in our practice where we give advice before anyone is hurt. Pull out your auto policy's declarations page and look for three things:

1. Your liability limits. Minimum limits protect your assets poorly if you cause a serious crash. Higher limits are inexpensive relative to the risk.
2. Your UM/UIM limits. Buy as much as you can reasonably afford, and never less than your liability limits. This is the coverage that protects you and your family from everyone else's bad decisions, and in our experience it is the single most valuable line on the page.
3. Medical payments coverage. A few thousand dollars of MedPay pays your bills immediately, regardless of fault, while the larger claim is sorted out.

An independent agent can price these options in a few minutes. The difference between minimum coverage and real coverage is often less than the cost of a monthly phone bill.

What this means for you

If you were injured by another driver after December 22, 2013, that driver's policy must now carry at least $25,000 per person, and your claim should be evaluated with that floor in mind. If your injuries are serious, assume from the start that the at-fault policy will not cover them, and have a lawyer identify your UIM coverage and any other responding policies before the three-year clock becomes a problem. Our car accident practice handles the liability claim and the UIM claim together so that nothing is left on the table.