A groundbreaking law regarding Ohio’s state minimum auto insurance coverage went into effect on December 22, 2013, raising financial responsibility limits for auto policies both newly issued and upon renewal.

The new law doubles Ohio’s longstanding minimum limits from $12,500/25,000/7,500 to $25,000/50,000/25,000. These new limits are the minimum amount of coverage a driver must carry for bodily injury or death to one person/bodily injury or death to more than one person/injury to property of others.

The new law protects us all in the event that we are injured as a result of another driver’s negligence in an auto collision. It is also a big step in the right direction for the clients of Denman & Lerner Co., LPA.  Our auto accident clients will now have more available to them to cover medical bills, vehicle damage and pain and suffering resulting from an auto crash.

The injury attorneys of Denman & Lerner Co., LPA strives to protect Ohio’s injured victims. While we continue our efforts, it is nice to see the State lawmakers are doing their part as well.

The following article by Teresa Dixon Murray of the Cleveland Plain Dealer, originally published on February 15, 2013, outlines the many benefits of the new law:

The last time Ohio raised its minimum requirement for auto insurance liability coverage, Richard Nixon was president, most TV shows were broadcast in black and white and eight-track tape players were the hot new option for cars.

For the first time in 44 years, the state is elevating its minimum liability coverage for drivers. That will mean higher premiums for the 5 percent of Ohio drivers who carry only minimum coverage, but  could mean lower auto premiums down the road for everyone else.

What’s perhaps more surprising than how long it took to get a new law passed: Both industry and consumer groups are against the new higher minimums because premiums for that coverage are expected to increase by at least 25 percent, and that could cause some people to drop coverage.

Under the current requirements, drivers in Ohio must carry insurance liability coverage that will pay up to $12,500 per person to cover injuries and medical costs, up to $25,000 per accident, and up to $7,500 property damage per accident.

The new requirements double the injury liability and more than triple the property damage. The new requirements are $25,000 injury per person or up to $50,000 per accident. The property damage liability coverage must be at least $25,000 to cover damage to other drivers’ vehicles or any other property besides your own.

The new liability limits have nothing to do with collision and comprehensive coverage that many drivers carry to repair their own vehicles if they have an at-fault wreck, or hit a deer, or if their car is broken into or damaged by hail.

The new law takes effect in March, but there is a nine-month grace period. So the higher minimums don’t kick in until Dec. 22. People don’t have to comply until their first policy renewal after that date.

Under Ohio’s current limits, only one state – Florida – has a lower injury liability limit than Ohio. And only four states — Pennsylvania, New Jersey, Massachusetts and California — have lower property damage limits.

Ohio’s new higher limits puts the state in line with most others.

But both the Ohio Insurance Institute and the Consumer Federation of America worry the new higher limits will cause more drivers to go without any liability coverage at all. 

As it is, about 11 percent of drivers licensed in Ohio do not carry any auto liability insurance, according to the Bureau of Motor Vehicles. The BMV compiled data from 2005 through 2011 through its random verification program.

Meanwhile, about 5 percent of insured drivers – or 400,000 Ohioans – have policies only at the minimum limits and will be required to buy more coverage.

Auto insurance premiums vary widely based on factors such as driving record, age, the type of vehicle and credit score. But it’s estimated that the price of a typical minimum liability policy will increase by 25 to 30 percent.

Solon independent insurance agent Tom Wasson estimated that a typical minimum coverage policy might cost $800 a year, or $67 a month. At the higher coverage requirement, that might jump to $1,000 a year, or $83 a month.

That will have an effect, said Dan Kelso, president of the Ohio Insurance Institute in Columbus, which represents insurance companies.

“When you raise the rates, it certainly doesn’t encourage more people to be financially responsible,” Kelso said.

“If someone wants to buy more coverage, there’s nothing prohibiting that,” he said. “We have said, ‘Let the consumer decide, not the state.’ “

Likewise, Robert Hunter at the Consumer Federation of America in Washington D.C. fears the higher premium costs could make insurance unaffordable for some.

“You can’t ask people to pay money they don’t have,” said Hunter, who is director of insurance for the consumer-focused group. “You can’t get blood from a stone.”

But Wasson, the Solon insurance agent, said people need to make financial responsibility a priority. Liability insurance is important, he said.

“People might say they can’t afford auto insurance but if you ask them, ‘Do you pay your cell phone bill every month for that smart phone? Do you have cable television? They’ll say, ‘Yes, of course.’ “

Wasson said he won’t even write policies at the current minimum limits because the level is ridiculously low and irresponsible. Even a young adult new to the job market with no assets should have $50,000 coverage for an injury and for property damage, he said, because it doesn’t take a very serious wreck to cause property damage or injuries that exceed those levels.

One who is praising the higher limits is John Van Doorn, executive director of the Ohio Association for Justice, which represents attorneys. The old limits were “woefully inadequate,” he said.

He noted that the most popular car in 1969 was a Ford Grand Torino, which cost $3,200 new. “Coverage of $7,500 doesn’t do much today,” he said, adding the typical new car costs $28,000 today.

Certified financial planner Bill Russo of Concord Financial Planners said the drastic increase in premiums could pinch people who are living paycheck-to-paycheck. The hike would have been less jarring if the minimum had increased gradually over the years. “When you don’t index something to inflation, things tend to get out of whack with reality.”

At Mayfield-based Progressive Corp., one of the nation’s largest auto insurers, it’s too soon to tell what impact the new law might have on premiums, said spokesman Jeff Sibel.

Kathy Virgallito, a regional director of partnerships for Apprisen, a credit-counseling agency in Columbus, said drivers who think they’ll have difficulty affording the higher premiums should shop around for the best price and also look for a company that offers monthly payments (often in exchange for automatic debit from a checking account).

“People learn to absorb increases,” she said. “They have to look at, ‘What do I cut back on?’ “

Wasson acknowledged that about 80 percent of property damage claims fall under $7,500. But he said the low minimum liability limits have been possible only because people carry coverage to protect against uninsured/ underinsured drivers. So if you’re hit by someone who has only $7,500 property damage coverage and your $30,000 SUV is totaled, your own auto insurance picks up the rest of the tab.

“What we’ve done is shifted the cost to you and me on our underinsured coverage,” Wasson said.

In theory, with higher minimum liability limits, the cost of uninsured/ underinsured coverage should go down because companies will have fewer underinsured losses.

Kelso of the Ohio Insurance Institute said it’s too soon to tell. “That’s a great philosophical question.”

Van Doorn said he doesn’t buy the argument that higher financial responsibility limits will push some into not being able to afford coverage.

If you look at the states with the highest minimum financial responsibility limits, they generally have the lowest percentages of uninsured drivers.

Maine, for example, has the among highest minimums nationwide (along with Alaska and Wisconsin), at $50,000/$100,000/$25,000. Maine, meanwhile, has the lowest rate of uninsured drivers, at 4.5 percent.

There are 10 states that have limits comparable to Ohio’s new limits. The percentage of uninsured among those 10 ranges from 8 percent in Nebraska to 28 percent in Mississippi.

So there’s not a direct correlation between insurance coverage and people who choose to drive illegally without insurance, Van Doorn said.

Hunter of the Consumer Federation said he’d like to see states adopt a low-income auto insurance plan like that in California. The low-cost plan is aimed at drivers who are at less than 250 percent of the federal poverty level (or $50,000 for a family of four) and have a good driving record, with no more than one accident or ticket in the last three years.

Further, he’d like to see more states ban insurance underwriting that relies on credit scoring and other factors that work against lower-income drivers.

Insurance rates should focus mostly on a person’s driving record, years of experience and miles driven a year, Hunter said.

“If people’s rates weren’t jacked up because of all of these other factors that have nothing to do with their driving, then insurance would be more affordable,” he said.

Figures from the Consumer Federation of America show the auto insurance coverage minimum requirements of each state, with the shorthand version of the rule beside the state name.

                                    -Teresa Dixon

 

Injury,
per person
Injury,
per accident
Property damage
per accident
Alaska
50/100/25
$50,000 $100,000 $25,000
Alabama
25/50/25
$25,000 $50,000 $25,000
Arkansas
25/50/25
$25,000 $50,000 $25,000
Arizona
15/30/10
$15,000 $30,000 $10,000
California
15/30/5
$15,000 $30,000 $5,000
Colorado
25/50/15
$25,000 $50,000 $15,000
Connecticut
20/40/10
$20,000 $40,000 $10,000
Delaware
15/30/10
$15,000 $30,000 $10,000
Florida
10/20/10
$10,000 $20,000 $10,000
Georgia
25/50/25
$25,000 $50,000 $25,000
Hawaii
20/40/10
$20,000 $40,000 $10,000
Idaho
20/50/15
$20,000 $50,000 $15,000
Illinois
20/40/15
$20,000 $40,000 $15,000
Indiana
25/50/10
$25,000 $50,000 $10,000
Iowa
20/40/15
$20,000 $40,000 $15,000
Kansas
25/50/10
$25,000 $50,000 $10,000
Kentucky
25/50/10
$25,000 $50,000 $10,000
Louisiana
15/30/25
$15,000 $30,000 $25,000
Maine
50/100/25
$50,000 $100,000 $25,000
Maryland
30/60/15
$30,000 $60,000 $15,000
Massachusetts
20/40/5
$20,000 $40,000 $5,000
Michigan
20/40/10
$20,000 $40,000 $10,000
Minnesota
30/60/10
$30,000 $60,000 $10,000
Mississippi
25/50/25
$25,000 $50,000 $25,000
Missouri
25/50/10
$25,000 $50,000 $10,000
Montana
25/50/10
$25,000 $50,000 $10,000
Nebraska
25/50/25
$25,000 $50,000 $25,000
New Hampshire
25/50/25
$25,000 $50,000 $25,000
New Jersey
15/30/5
$15,000 $30,000 $5,000
New Mexico
25/50/10
$25,000 $50,000 $10,000
Nevada
15/30/10
$15,000 $30,000 $10,000
New York
25/50/10
$25,000 $50,000 $10,000
North Carolina
30/60/25
$30,000 $60,000 $25,000
North Dakota
25/50/25
$25,000 $50,000 $25,000
Ohio
12.5/25/7.5
$12,500 $25,000 $7,500
Oklahoma
25/50/25
$25,000 $50,000 $25,000
Oregon
25/50/20
$25,000 $50,000 $20,000
Pennsylvania
15/30/5
$15,000 $30,000 $5,000
Rhode Island
25/50/25
$25,000 $50,000 $25,000
South Carolina
25/50/25
$25,000 $50,000 $25,000
South Dakota
25/50/25
$25,000 $50,000 $25,000
Tennessee
25/50/15
$25,000 $50,000 $15,000
Texas
30/60/25
$30,000 $60,000 $25,000
Utah
25/65/15
$25,000 $65,000 $15,000
Virginia
25/50/20
$25,000 $50,000 $20,000
Vermont
25/50/10
$25,000 $50,000 $10,000
Washington
25/50/10
$25,000 $50,000 $10,000
Wisconsin
50/100/55
$50,000 $100,000 $55,000
West Virginia
20/40/10
$20,000 $40,000 $10,000
Wyoming
25/100/15
$25,000 $100,000 $15,000

The Ohio Supreme Court has adopted 23 Domestic Relations and Juvenile forms for divorces, dissolutions, legal separations and parenting plans. Specifically, the Court has proposed the following list of forms:

Complaint for Divorce without Children; Answer; Final Judgment

Complaint for Divorce with Children; Answer; Final Judgment

Judgment Entry Converting Interest in Real Estate

Consent to Judgment Entry

Petition for Dissolution of Marriage; Judgment Entry

Separation Agreement

Parenting Plan; Final Decree of Parenting

Complaint for Parentage, Allocation of Parental Rights and Responsibilities (Custody), and Parenting Time (Companionship and Visitation)

Motion for Contempt and Affidavit

Show Cause Order, Notice and Instructions to the Clerk

Motion for Change of Parenting Time (Companionship and Visitation) and Memorandum in Support

Motion for Change of Parental Rights and Responsibilities and Memorandum in Support

Motion for Change of Child Support, Medical Support, Tax Exemption, or Other Child-Related Expenses and Memorandum in Support

Waiver of Service of Summons

Request for Service

According to the Court’s news release, “Key information, relevant instructions, and tips have been embedded in the forms using plain English as much as possible to assist self-represented litigants in pursuing their cases in court.”

The Ohio Supreme Court’sw standardized forms are designed to increase access to justice in family-law related proceedings in domestic relations and juvenile courts.

Local courts may use the forms to help with cases that concern divorces, dissolutions, motions for change in the allocation of parental rights and responsibilities (custody and visitation) and child support, and parenting plans.

The standardized forms will assist by promoting efficiencies and fostering uniformity in domestic relations and juvenile courts because some proceedings are similar in both courts. Additionally, attorneys practicing in multiple jurisdictions will benefit from consistent standards.

The forms, which became effective July 1, 2013 will be posted on the Supreme Court’s website in a format to be completed online or printed out for completion by hand.

The 23 forms adopted by the Supreme Court follow five other domestic relations forms adopted in 2010.

Lake, Geauga, Ashtabula, Lorain and Cuyahoga County residents in Ohio who are facing overwhelming debt may want to consider filing for personal bankruptcy under Chapter 7 of the Bankruptcy Code.
Often referred to as a “fresh start” bankruptcy, Chapter 7 is often the best solution to stop creditor harassment, prevent foreclosure, eliminate debts and begin reestablishing good credit. In addition, most of your assets will be safe from your creditors. Ohio law allows bankruptcy exemptions, including a homestead exemption, automobile exemption and cash exemption.
This means that Ohioans who file for bankruptcy can usually keep the homes that they live in so long as they are in good standing with their mortgage lender. Recent changes have been made to the homestead exemption to increase the maximum value of homes that qualify for the exemption. Typically, as long as your home does not have more than $132,000.00 of equity, it can be exempted from your bankruptcy creditors. This is good news for homeowners seeking Chapter 7 Bankruptcy relief.


Copyright 2013. Denman & Lerner Co., L.P.A.