Court Opinion

ID: 6792638
Source: CourtListenerOpinion
Date Created: 2022-07-21 01:13:13.560529+00
Date Added: 2024-06-11T16:03:04.188029
License: Public Domain

Pfeifer, J.,
dissenting.
{¶ 22} I dissent. I would hold that a unilateral reduction in underinsured-motorist coverage constituted a cancellation of the policy within the two-year guarantee period, which is forbidden by R.C. 3937.31(A). Moreover, the notice given by Allstate in this case was deficient; it in no way informed the Advents that their UM coverage dropped from $300,000/$500,000 to $50,000/$100,000.
{¶ 23} At the time the two-year policy period started on March 12, 2001, the Advents were insured for UM coverage up to their $300,000/$500,000 liability limits by operation of law. There is no evidence in the record that the Advents refused UM coverage up to the amount of their liability limits.
{¶ 24} For the six-month renewal period starting on September 12, 2002, Allstate purported to reduce the amount of the Advents’ coverage. A reduction in coverage constitutes a cancellation pursuant to R.C. 3937.31(A):
{¶ 25} “Where renewal is mandatory, ‘cancellation,’ as used in sections 3937.30 to 3937.39 of the Revised Code, includes refusal to renew a policy with at least the coverages, included insureds, and policy limits provided at the end of the next preceding policy period.”
*254{¶ 26} Allstate did not renew the coverage with the same policy limits that had been in effect at the end of the preceding policy period. It therefore canceled the policy. An insurer may cancel a policy only under certain circumstances set forth in R.C 3937.31(A), including misrepresentation, loss of driving privileges, and nonpayment of the premium. None of those circumstances existed in this case. R.C. 3937.31(E) allows an insurer to incorporate into a policy “any changes that' are permitted or required by this section or other sections of the Revised Code at the beginning of any policy period within the two-year period set forth in division (A) of this section.” Cancellation, as defined by R.C. 3937.31(A), is not permitted or required by that statutory section.
{¶ 27} In Shay v. Shay, 113 Ohio St.3d 172, 2007-Ohio-1384, 863 N.E.2d 591, this court held that statutory changes inuring to the benefit of the insured do not immediately take effect at the six-month renewal periods within the two-year guaranteed period. In Shay, this court held that a statute invalidating the exclusion of a named insured’s vehicle from the definition of an uninsured motor vehicle was not incorporated into the policy at the six-month renewal. Instead, this court held that the changes brought about by statute were permissive, requiring an agreement between the parties for incorporation into the policy. This court held:
{¶ 28} “We thus hold that absent an agreement between the insurer and the insured to amend the policy terms at the six-month renewal point, R.C. 3937.31(A) and our decision in Wolfe v. Wolfe (2000), 88 Ohio St.3d 246, 725 N.E.2d 261, prevent an insurance company from amending the terms of its policy to increase the amount of coverage it provides, at the six-month point of renewal.” Shay, 113 Ohio St.3d 172, 2007-Ohio-1384, 863 N.E.2d 591, ¶ 31.
{¶ 29} The majority seems to forget the Shay requirement of “an agreement between the insurer and the insured to amend the policy terms.” From the Shay holding, one would conclude that an endorsement would be required to effectuate a change. But the majority determines that the Advents, by failing to take action to modify the stated UM coverage limits, consented to the changes in their policy.
{¶ 30} This conclusion is based upon the “Important Notice” Allstate sent to the Advents and its notification to the Advents at the renewal period that their UM limits were lower than their liability limits. The “Important Notice” reads:
{¶ 31} “We’d like to let you know that we’ve changed the process for selecting and making changes to Uninsured Motorists Insurance for Bodily Injury and Uninsured Motorists Insurance — Property Damage.
{¶ 32} “Effective immediately, you can add or remove Uninsured Motorists Insurance for Bodily Injury and Uninsured Motorists Insurance — Property Damage and increase or decrease your limits under Uninsured Motorists Insurance *255for Bodily Injury by simply calling your Allstate representative. There will be no forms to sign.
John M. Gonzales, L.L.C., and John M. Gonzales, for appellant.
Lane, Alton & Horst, L.L.C., Rick E. Marsh, and Monica L. Waller, for appellee.
{¶ 33} “Please refer to the enclosed Policy Declarations to determine if your policy currently has Uninsured Motorists Insurance for Bodily Injury and Uninsured Motorists Insurance — Property Damage.
{¶ 34} “If Uninsured Motorists Insurance for Bodily Injury or Uninsured Motorists Insurance — Property Damage is not included in your policy and you would like to purchase it, or if you would like to increase or decrease the Uninsured Motorists Insurance for Bodily Injury limits shown on the Policy Declarations, please feel free to contact your agent or the Allstate Customer Information Center * *
{¶ 35} The notice was deficient. It does not mention that Allstate is incorporating into the policy a recent legislative enactment. It does not notify the Advents of changes in the amount of their UM coverage. Instead, the “Important Notice” reads more like the announcement of Allstate’s self-created new system for easing the process for changing UM coverage. The notice does not state that any reduction in coverage amounts has occurred or will occur. The notice does not set forth what the law was before the passage of 2001 Am.Sub. S.B. No. 97 or how that enactment has shifted the law. There is no alerting of the insured that there has been any change in the policy itself. There is no notice that although the declarations page continues to state the UM coverage as $50,000/$100,000, the true value of that coverage has decreased from limits that had been $300,000/$500,000.
{¶ 36} The same can be said of the notices included with the renewals that told the Advents that their UM limits were less than their liability limits. Those notices do not indicate any change in the amount of coverage available. None of Allstate’s notices could have indicated to the Advents that they were agreeing to any changes in their policy limits.
{¶ 37} For all of the above reasons, the law in effect at the beginning of the two-year guarantee period was in effect at the time of the accident. By operation of law under former R.C. 3937.18(A), the Advents’ UM coverage limits matched those of their liability coverage.
Mark Segreti Jr.; and Paul W. Flowers Co., L.P.A., and Paul W. Flowers, urging reversal for amicus curiae Ohio Academy of Trial Lawyers.
Gallagher, Gams, Pryor, Tallan & Littrell, L.L.P., and James R. Gallagher, urging affirmance for amicus curiae Ohio Association of Civil Trial Attorneys.