Summary
In Grange Mut. Cas. Co. v. Volkmann (1978), 54 Ohio St.2d 58, 8 O.O.3d 70, 374 N.E.2d 1258, paragraph one of the syllabus, this court held: "R.C. 3937.18 requires that every automobile liability insurance policy issued in this state provide uninsured motorist protection, and such coverage can be eliminated from a policy of insurance only by the insured's express rejection thereof."
Summary of this case from Scelza v. Employers Mut. Liab. InsOpinion
No. 77-692
Decided April 19, 1978.
Insurance — Automobile liability — Uninsured motorist coverage — Eliminated, how — "Other owned vehicle exclusion" repugnant to public policy.
1. R.C. 3937.18 requires that every automobile liability insurance policy issued in this state provide uninsured motorist protection, and such coverage can be eliminated from a policy of insurance only by the insured's express rejection thereof.
2. Where an insured owns three automobiles and has obtained uninsured motorist coverage for each vehicle by purchasing three separate but identical policies of insurance from a single insurer that insurer may not avoid indemnification of its insured under two of those coverages by including in each insurance contract an "other owned vehicle" exclusion. Under the foregoing circumstances such an exclusion is repugnant to the public policy expressed in R.C. 3937.18.
APPEAL from the Court of Appeals for Summit County.
On May 8, 1969, appellee Carl Volkmann's two daughters, Marsha Brett and Donna Miller (also appellees herein), sustained bodily injuries when the 1965 Chevrolet in which they were riding collided with an automobile being operated by an uninsured motorist. At the time of this accident Volkmann owned the 1965 Chevrolet and two other vehicles, all of which were insured by appellant, Grange Mutual Casualty Company (Grange), under separate but identical policies. Each policy contained uninsured motorist coverage in the sums of $10,000 for injury to one person and $20,000 for each accident or occurrence.
After the accident Grange acknowledged that uninsured motorist coverage would be available to the injured appellees pursuant to the terms of the one policy which described the 1965 Chevrolet as the "insured automobile." However, because the two women were "insured[s]" under the terms of all three policies, appellees filed a demand for arbitration, urging that their damages should be indemnified by aggregating, or "stacking," the $10,000 per person coverage afforded in each of the three policies.
Under "Part IV — Protection Against Uninsured Motorists," the term "insured" is defined to include "the named insured and any relative."
Grange refused to allow stacking of coverages, basing its position primarily upon the following policy provision:
"Exclusions: This policy does not apply under Part IV [Protection Against Uninsured Motorists]:
"(a) to bodily injury to an insured while occupying an automobile (other than an insured automobile) owned by the named insured or a relative, or through being struck by such an automobile."
This case originated in the Court of Common Pleas of Summit County when appellant filed an action in declaratory judgment against appellees seeking a determination as to whether appellees could require accumulation of the $10,000 per person coverage in the separate policies, thereby attaining coverage in excess of the individual policy limits. The Court of Common Pleas found in appellant's favor, holding that Grange had provided, under the policy describing the 1965 Chevrolet, the minimum uninsured motorist coverage than permissible under R.C. 3937.18. In addition, the court stated that the language of the pertinent exclusion was so definite that the insureds, appellees herein, were duly notified that their coverage would not exceed the statutory requirements.
As pertinent to the instant cause R.C. 3937.18 provides:
"(A) No automobile liability or motor vehicle liability policy of insurance insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance, or use of a motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless an equivalent amount of coverage for bodily injury or death is provided therein or supplemental thereto under provisions approved by the superintendent of insurance, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom. The named insured shall have the right to reject such coverage, or may require the issuance of coverage for bodily injury or death in accordance with a schedule of optional lesser amounts approved by the superintendent, that shall be no less than the limits set forth in section 4509.20 of the Revised Code for bodily injury or death."
On appeal, the Court of Appeals found the disputed exclusion to be repugnant to the intent and spirit of R.C. 3937.18 and accordingly reversed the judgment below. The appellate court concluded that, to the extent of their actual losses, appellees were entitled to stack the uninsured motorist coverage since a separate premium had been paid therefor under separate policies of insurance.
The cause is now before this court pursuant to the allowance of a motion to certify the record.
Messrs. Buckingham, Doolittle Burroughs and Mr. Donald H. Powell, for appellant.
Blakemore, Rosen Norris Co., L.P.A., Mr. A. William Zavarello and Mr. Jeffrey T. Heintz, for appellees.
The sole issue presented by the instant appeal is whether it is permissible for an insurer, which is providing uninsured motorist coverage to its insured's three vehicles under individual policies of insurance, to avoid liability under all but one of those coverages by inserting in each insurance contract the "other owned vehicle" exclusion set out above. Appellant insurer would have this court enforce such contractual provisions in the policies covering the two uninvolved Volkmann automobiles since the insureds ( i. e., Volkmann's two daughters) have sustained bodily injuries while occupying an automobile which is owned by the named insured, Volkmann, but which is not an "insured automobile" under the terms of those policies which specifically describe the two uninvolved vehicles.
In view of the specific fact situation presented in the cause at bar we need not at this time enter the ongoing controversy over the "free ride" effect. The weight of authority in this country holds that where a person is operating a motor vehicle which does not have uninsured motorist coverage, and sustains bodily injury as the result of the negligent operation of another uninsured vehicle, the injured person may recover under the uninsured motorists coverage(s) of another vehicle (or vehicles) owned by a member (or members) of that person's household, even in the face of an exclusion purporting to deny coverage in such a circumstance. Mullis v. State Farm Mutual Auto Ins. Co. (Fla. 1971), 252 So.2d 229; Nygaard v. State Farm Mutual Auto Ins. Co. (1974), 301 Minn. 10, 221 N.W.2d 151; State Farm Mutual Auto. Ins. Co. v. Hinkel (1971), 87 Nev. 478, 488 P.2d 1151; Bell v. State Farm Mutual Auto. Ins. Co. (W.Va. 1974), 207 S.E.2d 147. Contra, e.g., Rodriguez v. Maryland Indem. Ins. Co. (1975), 24 Ariz. App. 392, 539 P.2d 196, and cases cited therein. See, generally, Widiss, A Guide to Uninsured Motorist Coverage, Section 2.9 (1969 and Supp. 1976).
Appellant urges that this court be mindful of the familiar observation made in John Hancock Mutual Life Ins. Co. v. Hicks (1931), 43 Ohio App. 242, at page 247:
"A policy of insurance is a voluntary contract, and may be made upon such terms and conditions as are agreed upon by the parties thereto so long as they are not in conflict with public policy."
This court, in Abate v. Pioneer Mutual Cas. Co. (1970), 22 Ohio St.2d 161, 165, has described the public policy behind the statutorily-required offering of uninsured motorist coverage, as follows:
"Uninsured motorist coverage * * * is designed to protect persons injured in automobile accidents from losses which, because of the tortfeasor's lack of liability coverage, would otherwise go uncompensated."
In Curran v. State Automobile Mutl. Ins. Co. (1971), 25 Ohio St.2d 33, this court struck down a standard "other insurance" clause designed to relieve the insurer from liability in a situation where an insured passenger had other uninsured motorist coverage available to him, even though that other coverage was insufficient to indemnify the insured to the full extent of his loss. We held such a clause to be repugnant to R.C. 3937.18. The insured was therefore permitted to share in the vehicle owner's primary coverage and, if not indemnified to the full extent of his injury, to recover under his own uninsured motorist coverage.
In Weemhoff v. Cincinnati Ins. Co. (1975), 41 Ohio St.2d 231, this court reviewed a lower court decision which had disallowed stacking of uninsured motorist coverages by an insured who paid separate premiums for coverage of two vehicles under one policy of insurance. The insurance policy at issue in Weemhoff contained a provision which informed the insured that "[t]he limit of liability * * * stated in the declarations as applicable to `each person' is the limit of the company's liability for all damages * * * because of bodily injury sustained by one person as the result of any one accident * * *." In affirming the appellate court judgment we found that although the insured had paid two separate premiums to secure uninsured motorist coverage for his two vehicles, the dictates of R.C. 3937.18, and public policy, were satisfied when the minimum statutory limits were available under the one policy which the insured had purchased. The insured could therefore not require that separate coverages within one policy of insurance be aggregated.
Appellees correctly point out that dicta comprising footnote three to Weemhoff, supra, at page 234, is germane to the issue presently before us, since it provides as follows:
"We do not, however, consider the individual premiums as creating two separate policies which would allow appellants to stack coverages. See, Curran v. State Automobile Mutl. Ins. Co. (1971), 25 Ohio St.2d 33, 266 N.E.2d 566."
Upon analysis of the holdings in the above-cited cases we perceive no difference in principle between the "other insurance" clause invalidated in Curran, supra, and the "other owned vehicle" exclusion presently before us. Both provisions are an attempted means to avoid the statutory obligation of providing uninsured motorist coverage, and as such both are contrary to the policy behind the enactment of R.C. 3937.18.
The unambiguous and mandatory language of R.C. 3937.18(A) dictates that "[ n] o automobile * * * policy * * * be delivered * * * unless * * * coverage for bodily injury or death is provided therein * * * for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles * * *." (Emphasis added.) Clearly, this statute requires that uninsured motorist coverage be provided within each policy of automobile liability insurance issued in this state, and the statute contains no suggestion that relief from this obligation is to be implied where an insured owns more than one vehicle and has occasion to purchase separate policies of insurance thereon. It would certainly be anomalous for this court to allow the insured in Curran to stack his uninsured motorist coverage with that of a third person, but under the present circumstances to refuse to allow the insured to aggregate the limits on two policies which he himself has purchased.
We note that after interpreting similar exclusionary clauses in cases involving closely analogous circumstances several state appellate courts have arrived at the same conclusion reached by this court above. Boettner v. State Farm Mutual Ins. Co. (1972), 388 Mich. 482, 201 N.W.2d 795; Beek v. Ohio Cas. Ins. Co. (1977), 73 N.J. 185, 373 A.2d 654; State Farm Mutual Auto. Ins. Co. v. Harper (1972), 125 Ga. App. 696, 188 S.E.2d 813; Crenwelge v. State Farm Mutual Auto. Ins. Co. (La.Ct.App. 1973), 277 So.2d 155. Accord Southern Farm Bureau Cas. Ins. Co. v. Roberts (Miss. 1975), 323 So.2d 536.
It is our decision that appellees herein may stack all uninsured motorist coverages for which they have paid a separate premium in a separate policy of insurance. The concluding admonition found in Curran, supra ( 25 Ohio St.2d 33 ), at page 39, bears repetition here: "`[W]e do not wish to imply that injured parties may be permitted to pyramid separate coverages so as to recover more than the actual loss.'"
The judgment of the Court of Appeals is hereby affirmed.
Judgment affirmed.
O'NEILL, C.J., HERBERT, W. BROWN, P. BROWN, SWEENEY and LOCHER, JJ., concur.