Published September 23, 2026 · By Terry W. Posey, Esq.

After a serious crash, most people think of the other driver's insurance company as the party they are really dealing with. The adjuster calls you. The adjuster makes the offer. The adjuster denies the claim. So when that company refuses to pay, it feels natural to want to sue the insurance company itself.

In Ohio, you usually can't, at least not first. On September 17, 2026, the Eighth District Court of Appeals explained why in Clarke v. American Family Insurance Co., 2026-Ohio-3639. The ruling doesn't create new law. It lays out, step by step, rules that every injured Ohioan should understand before an insurance company's "no" leads them down the wrong path.

What Happened

According to the complaint, the crash happened on I-480 near Cleveland in April 2024. A driver fleeing police at more than 100 miles per hour in a Ford Mustang struck the injured man's vehicle. The Mustang was insured under a policy issued to the driver's parents, and the son was listed on it as a "nondriver." His license had been suspended a few months earlier. The parents' insurer denied coverage.

A family member of the injured driver then filed suit without a lawyer. She sued the parents' insurance company for breach of contract, bad faith, and negligence, asked the court to declare that the policy covered the crash, and sued the parents for negligent entrustment. She did not sue the at-fault driver. The trial court threw out every claim, and the court of appeals affirmed.

Rule One: Your Claim Is Against the Driver, Not the Driver's Insurer

The court repeated a basic principle of Ohio insurance law. A standard liability policy is a contract between the insurance company and its own customer. It is not a contract for the benefit of the people that customer injures. The injured person's claim is against the person who caused the crash.

Ohio's statute on this, R.C. 3929.06, sets the order. First you get a final judgment against the at-fault driver. If the insurer has not paid that judgment, up to the policy limits, within 30 days, you can then bring the insurer into court with a supplemental complaint. The statute expressly bars a suit against the insurer before both of those things happen.

The same order applies to asking a court to decide the coverage question. Under R.C. 2721.02(B), someone who is not insured under the policy cannot ask for a declaratory judgment on whether it covers the crash until they have a final judgment against the insured driver. In Clarke, no one had sued the driver, so the coverage question was simply not ready to be decided.

None of this means the insurer stays out of the picture. In real life, the at-fault driver's insurer usually hires the defense lawyer, handles the negotiations, and writes the settlement check. The rule is about who the defendant is in court, not about who ends up paying.

Rule Two: Only the Insurer's Own Customer Can Sue It for Bad Faith

The court also held that an injured third party cannot sue the other driver's insurer for bad faith. The duty of good faith runs from an insurance company to its own insured. The insurer does owe its customer a duty to negotiate with you in good faith, but it owes you, the injured stranger, no independent duty of its own.

That is very different from your relationship with your own insurance company. When you make a claim under your own policy, such as medical payments or uninsured motorist coverage, your insurer does owe you good faith. We explained those duties in Where Did My MedPay Go? An Ohio Court Explains Your Own Insurer's Duties After a Crash.

Rule Three: Paying for the Insurance Is Not the Same as Handing Over the Keys

The claim against the parents was for negligent entrustment. That is the rule that makes a vehicle owner responsible for lending a car to someone they know, or should know, is unlicensed or unfit to drive. Under the Ohio Supreme Court's longstanding test from Gulla v. Straus (1950), you have to show that the car was driven with the owner's permission, that the driver was in fact incompetent, and that the owner knew or should have known it.

Here, according to the complaint, the son was the titled owner of the Mustang. The parents only carried the insurance on it. The court held that the claim failed because the parents were not the owners, and no case law had been offered holding that paying the premiums gives someone enough control over a car to meet the permission element. The court expressly declined to decide whether insurance payments could ever be enough.

So negligent entrustment remains a real claim in Ohio when an owner lends a car to a driver they know has no license or a dangerous record. But the question of who owned and controlled the car matters, and title and registration records are often where that answer starts.

What If the Other Driver's Insurer Denies Coverage?

This is the part of Clarke that matters most to someone badly hurt. A coverage denial feels like a dead end, but it often isn't.

If you carry uninsured motorist (UM) coverage on your own policy, Ohio's UM statute, R.C. 3937.18, treats an at-fault driver as "uninsured" when the driver's liability insurer "denies coverage" to that driver. In other words, the same denial that blocks you on the other side can open the door to your own coverage. Your policy's specific terms, including prompt-notice requirements, still apply, so the denial letter should be kept and your own insurer told about it.

UM coverage is optional in Ohio. If you are not sure whether you have it, look at your declarations page today, before you ever need it.

One More Lesson: Family Members Can't Handle the Case for You

Early in Clarke, the trial court struck the first filings because a non-lawyer had tried to represent the injured man under a power of attorney. Ohio law does not allow that. A spouse, parent, or adult child can help in many ways, but they cannot file and argue an injured person's case in court on that person's behalf. And people who represent themselves are held to the same rules as lawyers.

What You Should Take From This

Point the claim at the right defendant. The case is against the person who caused the crash, and sometimes the owner who handed them the keys. The insurance company generally comes in through the driver.

A coverage denial is a starting point, not an ending. Check your own policy for UM coverage, and keep every letter the other insurer sends you.

Watch the clock. While insurance questions get sorted out, the deadline to sue the at-fault driver keeps running. In most Ohio injury cases it is two years from the crash. See How Long Do I Have to File a Car Accident Claim in Ohio?

Talk to a Dayton Car Accident Lawyer: Free

When an insurer denies coverage, or there's a question about who owned the car or who was allowed to drive it, the order of the claim matters. At the Law Offices of Terry W. Posey, we have handled Dayton-area car accident cases for over 30 years. The consultation is free, and you pay no fee unless we win. Call 937-236-6444.