Q: I have a driver’s license. What else do I need to legally drive in the state of Ohio?
A: In order to legally drive in Ohio, you must show that you have met the requirements of the Ohio “financial responsibility” law.
Q: What does the Ohio “financial responsibility” (FR) law require?
A: The FR law requires Ohio drivers to show that they can pay for injuries or damages they may cause to others if they are responsible for causing an accident.
Q: Must I buy automobile insurance to comply with the FR law?
A: Drivers usually comply with FR law requirements by buying automobile insurance, but a driver also may comply by purchasing a financial responsibility bond. Bonds are issued by the Ohio Bureau of Motor Vehicles or by an authorized insurance company. The minimum required bond amount is $30,000. Bonds are similar to automobile insurance, but they do not provide coverage for a particular vehicle. Instead, they cover only the person named in the bond for bodily injury or property damage caused by that person. Therefore, if you buy a financial responsibility bond to comply with the FR law, the bond will not protect any other driver who may cause an accident while driving your vehicle. Also, the bond will not pay for damages to your vehicle or for injuries to you or your passengers.
Q: If I do not purchase a financial responsibility bond, what type of insurance must I buy?
A: Ohio law requires drivers to maintain liability insurance coverage for each automobile registered in the state. Liability insurance pays for claims that arise if you are responsible for injuring another person or damaging another person’s property while driving your vehicle. Currently, Ohio law requires drivers to carry a minimum of $25,000 in insurance coverage for each injured person, and a minimum of $50,000 for all persons injured in an accident. Additionally, you must carry a minimum $25,000 in insurance coverage for damage you may cause to another’s vehicle or other property.
You may wish to buy more than the required limits of liability coverage. If the value of the injuries or damages you cause is in excess of your liability limits, you could be held personally responsible for any excess amounts. Review your liability insurance limits and consider increasing your coverage, if necessary, to protect your personal assets.
Q: What other types of insurance might I consider buying?
A: You may also choose to buy insurance coverage to protect yourself or your vehicle in the event of an accident. The most common types of optional coverage are medical payments coverage, collision coverage, comprehensive (other than collision) coverage and uninsured/underinsured motorists coverage.
Medical payments coverage pays for medical expenses, up to a specified amount, incurred by you or your passengers as the result of an accident, no matter who is at fault.
Collision coverage pays for the costs to repair damages to your vehicle resulting from a collision with another object (unless the collision involves an animal).
Comprehensive (other than collision) coverage pays for the costs to repair damages to your vehicle caused by something other than a collision. This coverage also pays for damages caused by collision with an animal, such as a deer. Other causes of damages covered include loss due to theft, vandalism, fire, and explosion. Comprehensive coverage also covers weather-related damage, including hail and flood damage.
Uninsured/underinsured motorists coverage protects you against losses caused by another driver who is either uninsured, underinsured, or unidentified, such as a “hit and run” driver. This coverage takes the place of the liability coverage the uninsured/underinsured at-fault driver did not have. Uninsured motorists coverage (UM) pays claims for injuries to you and your passengers if a driver without insurance hits you. Underinsured motorists coverage (UIM) pays claims for injuries to you or your passengers if a driver without enough insurance hits you.
In Ohio, you can make a claim for UIM insurance if your UIM limits are more than the liability limits of the underinsured driver. This is often referred to as “gap” coverage. You may claim the difference between the amount of the underinsured driver’s liability limits and your UIM limits, up to the amount of your injuries. For example, if you have a $50,000 UIM limit and the underinsured driver has a $25,000 liability limit, you could claim up to $25,000 from your UIM insurance depending on the amount of your injuries. If you have a $40,000 injury claim you would receive $25,000 in UIM insurance ($25,000 from the underinsured driver + $15,000 UIM = $40,000). But, if you only have a $25,000 UIM limit, you would not be able to claim anything, since your UIM limits are not more than the liability limits of the underinsured driver.
Uninsured motorists property damage coverage (UMDP) is also available in Ohio and protects you against losses resulting in damage to your vehicle caused by an uninsured driver. If you already have collision coverage, you may not want to buy UMPD coverage, since collision insurance pays for the same types of damage, except that with collision insurance you may have to pay a deductible. In Ohio, you can only buy UM/UIM/UMPD coverage up to the amount of liability coverage you have purchased. You may not protect yourself with more coverage than you buy to protect other drivers.
This “Law You Can Use” column was provided by the Ohio State Bar Association (OSBA). It was prepared by Deborah Kenney, attorney and senior managing consultant for The Motorists Insurance Group’s Columbus office.