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Part 3: Ohio’s Implied Uninsured Motorist Coverage after Advent v. Allstate Insurance Co.

If you practice in Ohio, you’re probably already aware that Ohio used to mandate Uninsured Motorist (“UM”) coverage, but that requirement was removed in 2001 by S.B. 97. Before 2001, if an insurer did not adequately offer and the insured did not adequately decline UM coverage, former Ohio Revised Code 3927.18 would operate to provide UM coverage to the full policy limits by operation of law (that is, the law would afford the insured UM coverage under the policy, even though it wasn’t in the policy to begin with).

What you may not be aware of is a 2008 Ohio Supreme Court decision, Advent v. Allstate Insurance Co. (118 Ohio St.3d 248, 2008-Ohio-2333, 888 N.E.2d 398), under which the Court determined that pre-2001 UM coverage that arose by operation of law continues after 2001 and S.B. 97. Prior appellate-level cases had split over whether the coverage was removed by operation of law after S.B. 97, upon any renewal of the policy.

The Advent Court held that removing the UM coverage was a “change” to the policy, to which change the insurance company and the insured must agree. Id. at ¶15. So, if you or your client had an auto policy in Ohio before 2001, and UM coverage arose because the insurer did not get a proper UM rejection, in writing, from the insured, there is a possibility that the UM coverage continued.

Advent does not set the bar too terribly high, though, merely requiring that the insured consent to the change in coverage. In that case, the insurance company had sent a notice to the customers to the effect that the process by which customers select or decline UM coverage was changing, that the customers should check whether they have UM coverage by looking at the declaration page of their policy, and that they should contact their agent if they want to change their policy. Id. at fn. 4. This was sufficient notice whereby the customers, having failed to take action to modify the limits, effectively “consented to the changes in their policy.” Id. at ¶18.

Similarly, the Eighth Circuit found that an insurer had incorporated the S.B. 97 changes into an auto policy through an “Important Notice” sent to the customer, alerting the customer that they do not have UM coverage, but may purchase UM coverage by talking with their broker. Kudla v. Wendt (Kudla II), 8th Dist. No. 89375, 2008-Ohio-3025. The Kudla court had granted reconsideration pending the Advent decision, and determined (again) that the notice, combined with the insured customer’s failure to act, showed consent to the change in the policy of removing UM coverage that had arisen by operation of law.

Have you dealt with uninsured motorist provisions, either before or after S.B. 97? Do you favor requiring this type of coverage, or at least requiring insurers to offer this type of coverage? Share your thoughts below! It’s quick and easy, and you may just help someone or get a question answered.

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