Ohio Underinsured Coverage – They took it away and still charge you a premium.

Yesterday we covered underinsured coverage in Ohio and specifically the minimum limits type of insurance. Those minimum limits are $12,500. We found out the broad view was rejected and the narrow view adopted. Today let’s explore who’s at fault for the narrow minded view.

It Really Sucks Being in an Auto Accident in Ohio

Steve Lombardi | February 03, 2010 12:01 PMDes Moines, IA

Ohio Underinsured Coverage – They took it away and still charge you a premium.

Steve Lombardi | February 04, 2010 8:01 AMDes Moines, IA

The narrow minded type says you set the minimum limits of financial responsibility and then underinsured coverage pays you the difference between what the other guy has and what your policy provides. So in the case of two minimum limit drivers, $12,500, all you’re going to get is $12,500.

The broader view looks at the amount of your damages; then applies the at-fault driver’s insurance coverage and if it’s not enough then applies your own coverage to make you whole. Say your damages are $100,000 and the other guy has only $12,500 and you have the same coverage of $12,500. Under the broader view, like we have in Iowa you’ll get the limits of both policies; an amount which in this example is $25,000. But under the narrow view you get only $12,500. All they are trying to do under the narrow view is provide the minimum amount of coverage. They don’t care about how much you were damaged or how much your medical bills cost beyond the minimum limits. They simply sell you insurance you can seldom if ever use.

The Ohio consumer got skunked by its own legislature. They had the broader coverage but got robbed by the people they elected to protect them. You had better broader coverage in Ohio and that was affirmed in 1993 by the Ohio Supreme Court in Savoie v Grange Mutual Ins. Co., 67 Ohio St. 3d 500 (1993). But the powers-that-be decided to take that away from Ohioans. They turned the law upside down and against the poor and those ignorant of insurance laws, (the young working adults mostly) By changing the law the legislature made the decision you weren’t worth the extra $12,500. The legislature allowed those who were financially irresponsible set the policy for all Ohioans. Simply stated they let those who could care less about your life, and think more about saving less than $100 per year to set financial responsibility laws. They allowed insurance companies and people with a low financial IQ to say how much you should get. How is simple they took it away. They actually passed a law to amend R.C. section 3937.18(C) to take away the Ohio Supreme Court’s interpretation of the coverage as being the broad form.

This is about as foolish a financial decision as I’ve seen. Who is the financial numskull that put their name on this bill?

In essence they screwed the young and the working poor, the poor elderly and anyone buying low limits of coverage in Ohio. But screwing the consuming public that elected them wasn’t enough; they didn’t stop there. While screwing the voters by allowing the sale of worthless insurance they still allowed the insurance companies to charge you a premium for underinsured coverage. Really I’m not kidding.

The insurance companies just hide the premium by grouping it into a single premium with uninsured motorist coverage. If you doubt me take out your Declaration Page and look to see if I’m right or if I’m wrong. Then pull out your policy and read the credit clause.

That’s a great margin of profit for them. I’m sure the Ohio insurance industry needed it for the next round of campaign contributions and CEO bonuses. Bingo! You’re screwed and they win.

Tomorrow let’s talk some more about this insurance scam going on in Ohio.