The Oregon Legislature just passed a very important update to Oregon’s motor vehicle insurance laws providing Oregonians with protection much more like the protection Washington drivers have enjoyed for years. Every Oregon driver pays for both under-insured motorist coverage, and personal injury protection coverage. Until the new law takes effect, there are loopholes in the Oregon statutes that, under certain circumstances, render these coverages worthless.
On January 1, 2016 the new law will require that under-insured motorist coverage be made available to Oregon drivers if their total damages are more than the at fault driver was insured for. That is, if another driver does not have enough insurance to cover your loss, they are now defined as “under-insured.” While this may seem self-evident, many people are surprised to learn that this has not been, and, indeed, is not currently the law.
Currently, another driver is only considered “under-insured” if he has less insurance coverage than you do. Not if he has less insurance coverage than your total damages. Thus, if you have a minimum policy providing $25,000 in coverage, and the other driver had the same minimum policy, he could not be defined as “under-insured” even if your total damages far exceeded $25,000. Thus, under the current law, you could not collect a dime of your own $25,000 “under-insured” motorist coverage.
This important change frees up your under-insured motorist coverage and makes it available to you whenever you are injured by a driver who has not purchased enough insurance to cover your damages.
In addition, every insured Oregon driver has also paid for Personal Injury Protection coverage that will pay for their medical expenses and wage loss after a car crash. However, even though you have paid premiums for this coverage, currently, and until the new law takes effect, your own insurance company could assert a lien against the at fault driver’s insurance, and drain his liability insurance policy. This lien is first in line before the injured party. Your insurance company can get paid back in full before you receive any damages. If the other driver had not bought enough insurance to cover both your own insurance company’s claims and your own damages, you were the one left out. This, again, despite the fact that you have been paying premiums for years.
Now, under the new law, your own personal injury protection carrier does not get paid back until all of your damages have been paid. Thus, the insurance that you have paid premiums for, does not get to take away the liability proceeds from the at fault driver. You are placed first in line, not your insurance company.
However, these amendment do not apply to existing insurance policies. It only applies to those policies that are issued or renewed AFTER January 1, 2016. Insurance policies often renew every 6 to 12 months. Therefore, to avoid any delay in the implementation of this coverage, it is important to have your policy re-issued, or renewed as soon after January 1, 2016 as possible.
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