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Motorists Mut. Ins. Co. v. Andrews12/14/1992
CACIOPPO, J.
The question presented to this court is whether underinsured motorist coverage is available to an insured where the tortfeasor's policy limit is greater than the insured's policy limits but the claims of multiple claimants have resulted in undercompensation of the insured's injuries. For the reasons which follow, we hold that underinsured motorist coverage is available, and affirm the court of appeals.
The central dispute in the case at bar is whether the accident involved an underinsured motorist within the meaning of R.C. 3937.18(A)(2). Motorists asserts that Mac's Transport was not underinsured because its policy limit, $750,000, was greater than the Andrews policy limits. On the other hand, the Andrewses contend that Mac's Transport was underinsured because the amount available for payment to the Andrewses was zero after the policy limit had been paid to Richard Andrews.
In considering this question, we first examine R.C. 3937.18(A)(2), which requires insurance companies to offer underinsured motorist coverage as part of every automobile insurance policy. This provision states that insurance companies must offer:
"Underinsured motorist coverage, which shall be in an amount of coverage equivalent to the automobile liability or motor vehicle liability coverage and shall provide protection for an insured against loss for bodily injury, sickness, or disease, including death, whether the limits of coverage available for payment to the insured under all bodily injury liability bonds and insurance policies covering persons liable to the insured are less than the limits for the insured's uninsured motorist coverage at the time of the accident. The limits of liability for an insurer providing underinsured motorist coverage shall be the limits of such coverage, less those amounts actually recovered under all applicable bodily injury liability bonds and insurance policies covering persons liable to the insured."
Motorists asserts that the comparison-of-the-limits approach applied by this court in Hill v. Allstate Ins. Co. (1990), 50 Ohio St.3d 243, 553 N.E.2d 658, leads to the result that Mac's Transport was not underinsured. The Andrewses counter that the Hill rationale is inappropriate in a case such as this, where the claims of multiple claimants have limited the amount which each injured party can recover. The Andrewses assert that if the position advanced by Motorists were adopted by this court, the public policy behind requiring underinsured motorist coverage would be circumvented.
This court examined the public policy behind underinsured motorist coverage in James v. Michigan Mut. Ins. Co. (1985), 18 Ohio St.3d 386, 389, 18 OBR 440, 443, 481 N.E.2d 272, 274-275:
"Underinsured motorist coverage was first required by statute after the legislature discovered the `underinsurance loophole' in uninsured motorist coverage - i.e., persons injured by tortfeasors having extremely low liability coverage were being denied the same coverage that was being afforded to persons who were injured by tortfeasors having no liability coverage. Thus, the original motivation behind the enactment of R.C. 3937.181(C) was to assure that persons injured by an underinsured motorist would receive at least the same amount of total compensation that they would have received if they had been injured by an uninsured motorist." (Emphasis sic.)
This court reiterated this policy in Hill, supra, 50 Ohio St.3d at 245, 553 N.E.2d at 661. Lower courts have also recognized and considered this policy in addressing these issues. See, e.g., Felber v. Grange Mut. Ins. Co. (Aug. 28, 1991), Summit App. No. 150
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