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Has insurance coverage shrunk?

Attorneys say the fine print is limiting payouts on claims.

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By Laura A. Bischoff, Staff Writer 1:08 AM Thursday, May 21, 2009

COLUMBUS — Let’s face it: When it comes to auto insurance policies, nobody really reads all that fine print.

But it’s in the hard-to-decipher clauses that Ohio’s insurance carriers are shrinking insurance protection, leaving drivers uncovered or under-covered in common accident scenarios, according to a report by the Ohio Association for Justice, a trade group of trial attorneys.

“Ohioans would be shocked to learn that their full coverage auto policy is often useless when they need it the most: after a serious accident to a family member or loved one,” the report said.

The association detailed how legislative changes and court decisions during the past eight years have favored the insurance industry.

“Consumers need to be aware that their full coverage policy is probably meaningless in a whole host of situations,” said Brian Wilson, an attorney in Canton. “They need to ask their agents some hard questions.”

Wilson estimated that fewer than 5 percent of consumers actually read and understand the fine print in insurance policies, which are typically mailed out weeks after they are purchased.

The Ohio Association for Justice focused on three common exclusions found in auto insurance policies that are designed to limit payouts on claims:

Family Exclusion: Relatives are barred from collecting money under the policy’s liability coverage if another family member is at fault. Example: Dad loses control of the car and seriously injures his wife and two children. Although their policy includes $500,000 in liability coverage and $5,000 per person in medical payments, the family can collect only $15,000 in medical payments.

Immunity Exclusion: Emergency vehicles responding to emergency calls are immune from liability under Ohio law. Example: You’re clobbered at an intersection by a fire truck with its lights and siren on and your family is seriously injured. You can’t sue the fire department and because of a 2007 court decision you can no longer file an uninsured motorist claim with your own carrier.

Non-Duplication Clause: Drivers may pay separate premiums for different coverage, such as liability, uninsured motorist and medical payments but that doesn’t mean they can collect on all three. Example: Jane is injured by an uninsured drunken driver and has $30,000 in medical bills. She bought medical payment coverage of $25,000 and uninsured motorist coverage of $50,000. Her insurer pays out $25,000 for medical bills but later when she files a $50,000 uninsured motorist claim, her carrier subtracts what they paid in medical bills and sends her a check for another $25,000 instead of $50,000.

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