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Ohio residents who get into car accidents may face enormous financial losses through no fault of their own. Changes to the state's insurance laws have put every family at risk, and insurance companies have been allowed to expand what is known as the "intra-family" exception to uninsured motorist policies to unreasonable limits.
People purchase automobile insurance in order to protect themselves financially against injuries and damages they may cause to others. Additionally, people purchase uninsured motorist/underinsured motorist (UM/UIM) coverage in order to protect themselves and their family from damages caused by an uninsured or underinsured motorist.
In October of 2001, a bill known as Senate Bill 97 made a number of noteworthy changes in Ohio’s insurance laws. The most significant change was the elimination of mandatory UM/UIM coverage. However, while UM/UIM insurance could still be sold, the new law allowed for insurance companies to exclude coverage under some circumstances. The law states in relevant part: (emphasis ours)
Any policy of insurance that includes uninsured motorist coverage, underinsured motorist coverage, or both uninsured or underinsured motorist coverage may include terms or conditions that preclude coverage for bodily injury or death suffered by an insured under specific circumstances, including but not limited to the following:
(1) The insured is operating or occupying a motor vehicle owned by, furnished to, or available for the regular use of a named insured, a spouse, or a resident relative of a named insured, if the motor vehicle is not specifically identified in the policy under which a claim is made. . ."
This exception is known as the intra-family, or "regular use" exception. The intra-family exception means an insurance company can deny UM/UIM coverage when the insured gets into an accident with a car that is not identified in the policy. So, if one is borrowing a car and gets into an accident with that car, the UM/UIM policy would not cover any losses or injuries.
Although the plain language of Senate Bill 97 explicitly limits the intra-family exception to vehicles not named in the policy, many, although not all, insurance companies throughout Ohio are selling policies that have enlarged the intra-family exception. Specifically, insurers are expanding the intra-family exception to include any motor vehicle owned by or furnished for the regular use of any family member. Unfortunately, Ohio courts have allowed insurance companies to widen the scope of the intra-family exclusion. The courts have reasoned that because the statute contains the language "including but not limited to the following", insurance companies can now limit UM/UIM coverage in any manner they see fit, including in ways that limit or contradict the exclusions that have been explicitly written into the statute.
The result of this reasoning has led to devastating results across the state. Now, every family is effectively uninsured if the family member driving the vehicle causes an accident and causes injuries to other members of the family. Bizarrely, non-family members or even total strangers who are passengers in a car that gets in an accident would be covered by UM/UIM, while family members of the driver would not be covered under the terms of the policy.
Most members of the public have no idea that their UM/UIM insurance may not cover their family if a member of their family causes an automobile accident. In fact, many insurance agents have no knowledge of this expansion in this unjust intra-family exclusion. When an individual purchases insurance for his or her family, they have little to no bargaining power with the insurance company. Most, if not all, insurance policies are "take it or leave it" propositions. Therefore, there is no way to for families to purchase additional coverage to protect family members in these situations. It is up to Ohio citizens to contact the legislature to pass new laws that specifically limit the intra-family exception. The more that people become aware of this burgeoning crisis, the more likely our legislature will take action.