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Changes in Auto Insurance Laws

December 17, 2015  |  General, Personal Injury, Resources, Uninsured Motorist  |  No Comments  |  Share

We wanted to inform you of an important recent change in Oregon’s Auto Insurance Laws, which could have a profound impact on you, your family, and friends if you get in an auto accident.

We have long held that in addition to Personal Injury Protection insurance (“PIP”), Uninsured Motorist (“UM”) and Underinsured Motorist (“UIM”) coverage is the most important coverage to protect you and your family.  Our firm’s extensive experience with serious injury claims shows that you cannot rely upon the person who hits you to have sufficient insurance to cover all of the losses you could sustain in a serious crash.  Therefore, it is important to ask your agent for the maximum coverage on UM/UIM insurance, because it is what will financially protect you and your family in the event you are seriously injured in a crash.

Recent legislative changes in Oregon finally allows auto insurance customers to collect on all the coverage you have been paying for with your insurance premiums. Starting with policies issued after January 1, 2016, you will receive the full amount of uninsured motorist coverage (and underinsured coverage) if you are injured by an at-fault, uninsured or underinsured driver.   Due to the serious injury cases we handle, a very high percentage of our clients have to look to their own UM/UIM coverage for insurance on their bodily injury claim because they are hit by people with either no insurance or too little insurance to cover their losses.  Nearly 100% of the professionals we have represented in injury cases have had to rely upon their own Uninsured or Underinsured Motorist coverage, because the people who hurt them don’t have sufficient insurance coverage to pay for the substantial financial losses when the client cannot return to work normally.

How does the new legislation change coverage for people in Oregon?  In the past, Oregon law allowed insurers to offset the amount of UM/UIM coverage you purchased, by the amount of insurance owned by the person who hit you.  As an example, if you were hit by someone with $25,000 in liability insurance, and you also had $25,000 in UM/UIM coverage, Oregon law prohibited you from getting any UM/UIM coverage through your own policy (even though you had paid for the coverage) because the amounts were equal. Only when you had more UM/UIM insurance than the person who hit you, could you ever get access to the difference in the amounts through your own insurer.  Under the old law, the total combined value was the amount of the highest policy, regardless of whether that was the liability policy of the at-fault party, or your own UM/UIM coverage.  This left people paying premiums for insurance coverage that they were prohibited from getting due to Oregon law.

With the new legislation, you will have access to the full amount of the UM/UIM coverage that you purchase.  This means that you will get access to the full additional coverage that you paid for.  As an example, before the new legislation if two people were in a crash and each had $25,000 in coverage, the total available to our client was $25,000.  Under the new legislation, they will have access not only to the at-fault party’s $25,000 in coverage, but also their own underinsured Motorist coverage of $25,000 to equal $50,000 total.  As the seriousness of the injuries increases, and as the amount of the policies on each side increase, this change can have a substantial impact on the outcome of a catastrophic injury case.  This is very important for people who sustain serious injuries of the variety we handle at our office, because it can make the difference between whether they can pay their doctors bills, pay for future treatment, or replace the income that they lose due to the injury.  This is particularly important for anyone who may have a large future diminished earning claim when their ability to work is impacted.

But, in order to get the benefit of the new legislation allowing you to get access to the entire amount, you must act. The law goes into effect on January 2, 2016 for auto insurance policies issued or renewed on or after that date. If your policy doesn’t renew until April and you get in an accident in February, you will not have this additional coverage.

In order to get the full coverage you have been paying for, and to qualify under the new law, you need to call or email your auto insurance company and tell your agent that you want your auto policy reissued effective January 2, 2016. Agents should quickly be able to help, including letting policyholders know if a reissue, rather than waiting for the scheduled renewal, might negatively impact other insurance you hold, such as umbrella coverage.  For those who have an old umbrella policy (in most cases 10 years or older), you should be very careful about renewing that umbrella policy under different terms, as certain types of coverage are no longer available under new Umbrella policy terms.  In particular, this includes umbrella coverage for UM/UIM situations.  Insurers stopped providing UM/UIM coverage as part of their umbrella policies, and if you still have that coverage under old umbrella policy coverage, you do not want to have an agent change that language.   Please make sure you discuss this with your agent to ensure that an older umbrella policy is not changed with different terms.

In addition to changes in the UM/UIM coverage, the legislature also extended the period of health care coverage from one year to two years under the Personal Injury Protection insurance in an auto policy.  This will hopefully allow people who are seriously injured to receive the care they need before being cut off from payment for their health care needs.

If you have questions about insurance coverage for your serious injury claim, feel free to contact us for a free consultation at (503) 227-1233.

 

Oregon Uninsured Motorist / Underinsured Motorist Coverage

uninsuredmotoristplate

We’ve received a number of questions raised by our last blog post about legislative changes to Oregon Uninsured Motorist (“UM”) and Oregon Underinsured Motorist (“UIM”) auto insurance.

The first question is “What is the purpose of Oregon UM/UIM insurance?”

If you are hit by a person with no insurance, you can make an Uninsured Motorist insurance claim against your own insurance policy.

If you are seriously injured by a person with a small amount of insurance and either your financial losses (called “economic damages” such as doctors bills and wage loss) or the severity of your injuries are worth more than that person’s full insurance policy, then you can make an Underinsured Motorist insurance claim against your own insurance policy.  This requires your own insurance company to approve the settlement before you settle, and the UIM claim to be set up properly, or you can lose your right to make a UIM claim.

The second question posed was “Is UM/UIM insurance mandatory in Oregon?”

UM/UIM coverage is mandatory in auto insurance policies written in Oregon.  You buy it as part of your policy.  The limits of your UM/UIM are by law, equal to the amount of your liability policy.  The only way that isn’t the case (even if written differently in your insurance policy “dec page”, which we see from time to time) is for the policyholder to sign an agreement with their insurance company saying they want a lower amount of coverage.  (You should never sign such an agreement).  We find this to be rare.  More often what you see is a clerical error where the UM/UIM coverage does not match the liability policy amounts purchased by the policyholder.   As an example, someone buys a $100,000 liability policy, but their insurance policy “declaration page” then says they have $25,000 in UM/UIM coverage.  This is not possible under Oregon law without the waiver signed by the policyholder.   We have seen several cases of this.   In those cases we contact the insurer and let them know that unless they have the signed waiver form, the policy limits for UM/UIM coverage are equal to the liability policy.  In all but one case, there was no signed waiver, and the client gets the increased amount of coverage.

The third question is “Is my UM/UIM coverage increased if I have an Oregon umbrella policy?”

An “umbrella policy” is usually offered to those who have both auto and homeowners coverage with the same insurer.  It is an extra policy to cover situations where the policyholder injures someone else, and wants increased coverage for their liability.  Unfortunately, most Oregon umbrella policies do not include UM/UIM coverage.

UM/UIM insurance is particularly important not just because so many people are uninsured.  It is because they are also underinsured.  Most people with assets buy umbrella insurance to minimize their risk of a large financial loss in the event they seriously hurt or kill someone.  What they don’t realize is that they aren’t really covering themselves or their family.  Anyone who wants to protect themselves or their families as a priority should buy more UM/UIM coverage than their liability policy.  This is particularly important for those with large incomes, or those with large monthly expenditures.  Most of our clients with large income (such as doctors) who sustain injuries that will change their career, end up with UM/UIM cases which makes this type of coverage particularly important.

While an umbrella policy does cover a situation where you have a large liability exposure, in most cases Oregon umbrella policies do not cover situations where you are hurt by an uninsured or underinsured driver.  So, while you can get an umbrella policy after you buy a certain amount of liability coverage for both your auto and home, you don’t get extra UM/UIM coverage.

As an example, lets say that you can buy an umbrella policy once you buy $250,000 of liability coverage on your auto.  If you buy an umbrella policy there is no reason to buy more liability coverage, because the umbrella will cover your liability beyond that.  But, there is a reason to buy more UM/UIM coverage, because the umbrella policy doesn’t cover you or a family member if hit by a person with no insurance or very little insurance.  So, lets say that you buy $250,000 in liability coverage, and buy a $5 million umbrella policy.  You have plenty of coverage for most serious injury cases if you cause the collision.  But what about if you get hit by someone else who has no insurance?  You only have $250,000 of Uninsured Motorist coverage.   If you have high medical bills, or are a high income earner, that isn’t going to cover your loss, and you can end up with life-long debt and lose everything because of someone else’s negligence.  With some of our clients having up to $1 million in medical bills alone, and many of them unable to work normally again, having a high value UM/UIM insurance policy becomes critical to covering the bills.  Which is the reason why it is important to talk to your insurance agent about maximizing your UM/UIM coverage even with an umbrella policy, before it is too late.  Generally UM/UIM coverage is inexpensive and it is the most important insurance for protecting yourself and your family from a devastating loss caused by someone else’s carelessness.