Changes to Car Insurance in Oregon

The Oregon legislature recently passed a bill significantly increasing the benefits available under motor vehicle insurance. The most significant changes are to uninsured and underinsured motorist coverage and PIP coverage.

The most significant change to the uninsured motorist coverage is that an injured person who gets a judgment against an uninsured motorist may try to prove greater damages when claiming under their own uninsured motorist coverage. This is a major departure from the “you only get one shot” rules that apply to most lawsuits.

In addition, uninsured motorist coverage applies in all cases involving state and local government drivers, regardless of whether the accident falls outside of the scope of the law allowing suits against the government.

On the other hand, if the injured person actually manages to recover something from the uninsured driver, they are still required to reimburse their own insurer.

For underinsured motorist coverage, the rule for applying policy limits has changed. Previously, in Oregon, if a person was injured by an underinsured motorist, the underinsured coverage on the injured person’s own policy paid the underinsured limit minus the limit on the other driver’s policy. As a result, the maximum that could be recovered in most cases was the underinsured limit. Under the new law, the recovery from the other driver is no longer deducted. The injured person can get both the other driver’s policy limit and still be eligible to get their full underinsured limit. The maximum is now the total of the two policies. Oregon law now matches Washington law on this point.

On the other hand, worker’s compensation, disability benefits, and similar recoveries are still subtracted from the underinsured coverage limit.

PIP coverage has been extended to allow two years for medical treatment. Previously, one year was available. In addition, PIP payments are now reimbursed to the insurer only if the injured person manages to recover, from all sources, more than their total damages instead of more than their economic damages. That means that pain and suffering recoveries will, in most cases, not be available to reimburse the insurer for PIP payments.

All of these changes apply to any policy issued after the law comes into effect, which will be some time later this year, based on exactly when the current session ends.

These changes will probably increase potential cost to insurance companies, and, I would not be surprised to see them ask the state for permission to increase premiums. It probably will not be a very large increase.

If you have insurance in Oregon and are injured in an accident, double check with your lawyer that he or she is up to date on these changes. If you get a settlement or win a suit, you don’t want to have your lawyer give back too much because he or she didn’t know about the new rules.