Motor Vehicle Insurance Legislative Update
The Oregon Legislature 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. Before the new law took effect, there were loopholes in the Oregon statutes that, under certain circumstances, could render drivers’ coverages worthless.
Having gone into effect on January 1, 2016, the updates to the law 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 had not been the law until 2016.
Previously, another driver was only considered “under-insured” if they had less insurance coverage than you did, not if they had less insurance coverage than your total damages. Thus, if you had a minimum policy providing $25,000 in coverage and the other driver had the same minimum policy, they could not be defined as “under-insured” even if your total damages far exceeded $25,000. Under the pre-2016 law, you could not collect a dime of your own $25,000 “under-insured” motorist coverage.
The important 2016 changes free up your under-insured motorist coverage and make 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 cover their medical expenses and wage loss after a car crash. However, even though you paid premiums for this coverage, before the new law took effect, your own insurance company was able to assert a lien against the at-fault driver’s insurance and drain their liability insurance policy. This lien was first in line before the injured party. Your insurance company could get paid back in full before you received any damages yourself. 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 could have been paying premiums for years.
Now, under the 2016 updates to the 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.