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OHIO SUPREME COURT STRIKES DOWN “DOUBLE-DIPPING”

FOR MEDICAL PAYMENT AND UM/UIM EXPENSES

By Timothy P. Heather, Esq.

Benjamin, Yocum & Heather, LLC

In its November 17, 2009 decision in State Farm Mut. Auto. Ins. Co. v. Grace, Slip Opinion 2009-Ohio-5934, the Ohio Supreme Court held that motor vehicle insurers may validly preclude UM/UIM coverage for medical bills when those same medical bills have been paid, or are payable, under the same motor vehicle policy’s medical payment coverage provisions. In Grace, the Ohio Supreme Court answered the following certified question in the affirmative:

“Does Ohio Revised Code Section 3937.18, as amended in 2001 by S.B.97 (effective October 31, 2001), permit insurers to include an express limitation of coverage in an automobile insurance policy that precludes payments made under Uninsured/Underinsured Motorist coverage for medical expenses that are paid or payable under the Medical Payments coverage purchased in the same policy?”

Grace concerned a potential class action against State Farm by numerous policyholders who were upset that State Farm would not allow them to “double dip” for medical bills under their policies’ medical payment coverage and UM/UIM coverage. The State Farm policies contain specific Non-Duplication language in the UM/UIM portions of the policies which precluded coverage for payment which was “paid or payable” under the State Farm policies’ medical payment coverage provisions. The decision was a unanimous one, with Justice Pfeiffer writing a separate concurring opinion.

The Supreme Court noted that: “Our paramount concern in construing statutes is legislative intent.” Since the General Assembly’s S.B.97 amendments to the UM statute allowed UM/UIM limitations “including BUT NOT LIMITED TO…” certain specifically enumerated exclusions, the Supreme Court reasoned that motor vehicle insurers have the right to include such limiting language in their motor vehicle insurance policies, even though that limitation is not specifically set forth in ORC 3937.18(I).