What Uninsured and Underinsured Motorist Coverage Is, and Why Every Ohio Driver Needs It

Published February 1, 2010 · Injury Law Basics

Every few weeks someone sits across from me with a serious injury, a clear-cut case against the other driver, and no realistic way to collect. The driver who ran the red light had no insurance, or had a bare-minimum policy that will not come close to covering a surgery and six months off work. The question then becomes whether the injured person bought the one coverage that could have protected them: uninsured and underinsured motorist coverage.

Most people have heard the abbreviations UM and UIM. Far fewer know what they do, and in Ohio, where the law does not require insurers even to offer them, a surprising number of careful drivers have none.

The two coverages, in plain English

Both coverages sit on your own auto policy and pay for your injuries when the at-fault driver cannot.

Uninsured motorist (UM) coverage applies when the person who hit you has no liability insurance at all. Under R.C. 3937.18(B), an "uninsured motorist" also includes a driver whose insurer denies coverage or goes insolvent, and, importantly, a hit-and-run driver who cannot be identified. For the hit-and-run situation the statute requires "independent corroborative evidence" that the unidentified driver caused the crash; your own word alone is not enough, which is one reason we urge people to get witness names at the scene.

Underinsured motorist (UIM) coverage applies when the at-fault driver has insurance, but not enough. Under R.C. 3937.18(C), UIM pays when the limits available from the at-fault driver are less than your own UIM limits. The statute also says the coverage is reduced by whatever the other driver's policy pays. That "setoff" is the part people misunderstand, and it deserves its own explanation.

Why the setoff makes your limits so important

Suppose you carry $100,000 in UIM coverage and the driver who hit you has a $25,000 policy. Your injuries are worth $150,000. The other driver's insurer pays its $25,000 limit. Your own UIM coverage then pays up to $75,000, which is your $100,000 limit minus the $25,000 already paid. Your total recovery is $100,000.

Now suppose you carry only $25,000 in UIM coverage, the same as the other driver. Because your limit is not higher than his, you are not "underinsured" at all under the statute, and your UIM coverage pays nothing. You collect $25,000 on a $150,000 injury.

The lesson is simple: UIM coverage only helps if your limits are higher than the limits carried by the drivers around you. Since many Ohio drivers carry minimum policies, modest UIM limits often provide no protection at all.

Ohio does not make insurers offer it

Here is the part that catches people off guard. R.C. 3937.18(A) says an Ohio auto policy "may, but is not required to, include" uninsured and underinsured motorist coverage. Ohio law once required insurers to offer these coverages to every customer. That is no longer the law. Today an agent can sell you a policy with no UM/UIM coverage, and nobody has to point it out.

That change shifted the burden onto drivers. If you have not looked at your declarations page recently, do it tonight. Look for lines labeled "Uninsured Motorists" and "Underinsured Motorists" and check the limits next to them. If the lines are missing or show a small number, call your agent.

How much should you carry?

Our recommendation to clients is to carry UM/UIM limits at least equal to your own liability limits, and higher if you can afford it. The additional premium for substantial UM/UIM limits is usually modest compared to the liability portion of the policy, because the coverage pays only when someone else is at fault and cannot pay.

Think about what a serious crash actually costs. An ambulance ride, an emergency-room visit, imaging, a single orthopedic surgery, and physical therapy can run well past six figures before you count a single day of lost income. A traumatic brain injury or a spinal-cord injury can mean a lifetime of care. A policy that pays $25,000 toward that is not protection; it is a down payment.

For families, the stakes are higher. UM/UIM coverage generally protects not just the named insured but household relatives, and it follows you as a passenger in someone else's car and in many cases as a pedestrian or cyclist struck by a vehicle. One well-chosen policy can protect everyone under your roof.

Things your own insurer may not mention

A few features of R.C. 3937.18 work against policyholders, and knowing them in advance helps.

• Time limits in the policy. R.C. 3937.18(H) allows an insurer to require that any UM/UIM claim or lawsuit be brought within three years of the crash. Many Ohio policies contain exactly that clause. If your case against the at-fault driver drags on, your UM/UIM claim can quietly expire.
• You still have to prove your case. Under R.C. 3937.18(D), you must prove everything you would have to prove against the at-fault driver: fault, causation, and the amount of your damages. Your own insurer is allowed to defend the claim the way the other driver's insurer would.
• Anti-stacking and exclusions. The statute permits insurers to prohibit "stacking" the limits of multiple policies and to exclude coverage in certain situations, such as when you are injured in a household vehicle not listed on the policy. The fine print matters.

When our office takes a car crash case, one of the first things we do is collect every policy that might apply: yours, the at-fault driver's, a resident relative's, the policy on the car you were riding in. Coverage is often found where people did not think to look. You can read more about how these claims work on our UM/UIM claims page.

What this means for you

If you have not been in a crash, this is the cheapest advice you will ever get: check your policy for UM/UIM coverage and raise the limits so they match or exceed your liability limits. It is the single most effective way an Ohio family can protect itself against a driver who has nothing.

If you have already been hurt by an uninsured or underinsured driver, do not assume there is no money. Have a lawyer review every policy in the household before you accept a settlement from the at-fault driver's insurer, because accepting that money without your own insurer's consent can jeopardize your UIM claim. And watch the calendar; the three-year clause in many policies does not wait for the other case to finish.