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Uninsured/Underinsured 101: Oregon Law

What if the driver who hit me didn't have auto insurance?

What if the driver who hit me only had minimum policy limits, and I have serious injuries that need to be compensated?

Uninsured Motorist Coverage

If the at-fault driver is UNINSURED: Essentially, the injured party's insurance company "steps into the shoes" of the uninsured driver, and pays the injured driver as if the uninsured motorist did have insurance. In Oregon, uninsured motorist coverage is mandatory in the coverage amount of $25,000. The limit of the amount of uninsured motorist coverage available to cover your damages increases to mirror the amount of liability coverage you purchase, unless the excess uninsured motorist coverage is waived in writing. For example, if you purchase $100,000 in liability coverage, normally, your uninsured motorist coverage will also increase to $100,000. You can waive this extra uninsured motorist coverage, but the $25,000 minimum is mandatory and cannot be waived.

This coverage provides for the insured driver, members of his household, and his passengers to receive damages (money) for injuries they receive from a negligent, uninsured driver. Claims to one's own insurance company can be made for personal injuries, medical expenses and lost wages. Any amount up to the policy limits may be paid.

A hit-and-run driver can be considered an "uninsured motorist" even though it is actually unknown if they had insurance or not. Also, uninsured motorist coverage covers you if you are a pedestrian struck by a vehicle. Real Life: If you are insured by ABC Insurance, and you are driving and are injured by a negligent driver who does not have insurance, your uninsured motorist coverage with ABC Insurance will pay for your injuries and pain and suffering (up to your policy limits) that were caused by the uninsured driver.

Underinsured Motorist Coverage

If the at-fault driver is UNDER-INSURED: Oregon also requires that drivers carry a minimum of $25,000 in underinsured motorist coverage. This coverage is enacted if you have a personal injury claim that is worth more than the at-fault driver's insurance coverage and your recovery from the at-fault driver is less than your own underinsured motorist limits. Unfortunately, in Oregon underinsured motorist coverage does not "stack".

In other words, if you have a personal injury claim against a driver with the same insurance coverage as your own underinsured coverage, you do not receive any benefits unless those liability limits are partially or entirely paid to someone else. Real Life: If you incurred $50,000 in medical expenses and the at-fault driver's insurance pays you their minimum $25,000 liability policy and your underinsured motorist coverage was the minimum $25,000, you receive nothing from your own insurance carrier. This is because in Oregon, your UIM coverage is reduced by the amount you recover from the liability carrier. Thus, if you have $50,000 in your own UIM coverage, and you recover $25,000 from the liability carrier, you can only recover another $25,000 from your own carrier.

This may seem unfair, since you've paid premiums for a policy worth $50,000 but can only receive $25,000 since you've already been paid $25,000 from the liability carrier.

How to Protect Yourself With the poor economy: Many drivers either have no insurance or the very lowest policy limits. I would suggest that you buy as much uninsured/underinsured motorist coverage that you can afford. The difference in premium payments between the lowest and the highest level of uninsured/underinsured coverage is minimal, but will be greatly appreciated if you are severely injured by a driver who does not have insurance.

Statutes and Dispute Resolution: In Oregon, uninsured/underinsured motorist policies are covered in ORS 742.502 and 742.504. Disputes over uninsured motorist coverage are usually handled by binding arbitration, which is often less expensive and time consuming than a jury trial. In some circumstances, and depending on the nature of the dispute, your own insurance company may even have to pay your attorney fees.

Translation of Limits: In an insurance policy, on the declarations page, it looks like this: UM/UIM $100,000/$300,000. Translated, this means that the policy limits are $100,000 for uninsured/underinsured motorist coverage per person, up to a total maximum of $300,000 per accident. Again, these coverage amounts are reduced by your recovery from the at-fault driver.

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