Chipping Away Individuals Rights: UM/UIM and Med-Pay
by Jason Eshelman
This article is a mere observation of the chipping away of individuals’ rights in Ohio, to which most average individuals are not aware.
Allow me to give some context. You are involved in an automobile accident. It was the other driver’s fault, however this driver either has no insurance at all or has the state minimum coverage and your damages exceed their policy limit. Now, you know you are still protected because you have good full-coverage insurance and you can file a claim through the Uninsured/Under-insured (UM/UIM) motorist part of your insurance policy. This means you can be compensated for your medical bills, lost wages and pain and suffering through your policy. For this, you pay an additional premium above and beyond what you would pay for liability coverage.
There is another part of your full-coverage policy called Medical Payments (Med-pay). This part of your policy will allow medical bills to be paid right away regardless of whether you caused the accident or not. This is a nice feature because in a liability law state (as opposed to a No-Fault state), you normally would have to settle your liability claim or UM/UIM claim in full before an insurance company will issue payment. For this, you pay a separate premium above and beyond liability coverage and UM/UIM.
Now let’s go back in time for a moment, say ten years or more. When presented with the situation described above, your insurance company could in no way off set the UM/UIM claim by what was paid through your Med-pay coverage. In layman’s terms, you could be reimbursed for the same medical bills under your Med-pay coverage and again through your UM/UIM coverage. The Supreme Court of Ohio, among other states, reasoned this was perfectly legitimate because you paid a separate premium for the two coverages and it would be “double dipping” on the part of insurance companies to not pay your medical bills under both provisions.1
Now it seems like a logical fix, doesn’t it? Insurance companies could simply include Med-pay with the purchase of UM/UIM coverage. However, that would reduce the amount of money generated through collecting the two premiums.
So, how did the tables turn? In 2001, through S.B. 97 the Ohio legislature relaxed the rules on what insurance companies were required to include in an auto insurance policy. The new rule says an insurance company “may” include UM/UIM coverage in a policy but is not required to.2
This change seems harmless enough. On the surface, it allowed our free market to fill a niche for lower cost insurance. A person could pay for liability coverage only and avoid the cost of UM/UIM and Med-pay if they felt it unnecessary.
Here comes a classic case of give someone (or some corporation) an inch and they’ll take a mile. Nowhere in the new law does it address or even mention Med-pay offsetting UM/UIM payments. That doesn’t stop one of the largest insurance companies in the country from taking a group of claimants all the way to the Supreme Court of Ohio to test a new theory that will save them a lot of money if they prevail. They inserted a “Non-Duplication of Payment” clause in their policies that says generally they won’t pay for the same medical bill twice. The insurance company spun O.R.C. section 3937.18 to say it “expressly permits insurers to insert exclusionary or limiting provisions into the UM/UIM portion of their policies.”2
The Supreme Court of Ohio had to dig so far as to cite the “uncodified language” of S.B. 97 and draw upon what they’ve determined to be the legislature’s intent to justify their agreeing with the insurance company.
Keep in mind that the Court had recently added a couple new justices that made it much more pro-business. This decision certainly begs the question, if an insurance company can limit coverage as long as the limitation is expressly written into the policy, I wonder when my claim will be denied because I was struck by a blue car?
Nevertheless, if your policy doesn’t currently have a ‘non-duplication of payment’ clause, then you still enjoy the right to get credit for medical bills under both UM/UIM and your Med-pay coverages. It likely won’t stay that way for long, though.
- 1 Grange Mut. Cas. Co. v. Lindsey (1986), 22 Ohio St.3d 153.
- 2 Ohio Revised Code section 3937.18
- 3 State Farm Mut. Auto. Ins. Co. v. Grace, 123 Ohio St.3d 471, 2009-Ohio-5934.
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