First-Party Insurance Disputes in Oregon
The term “first-party” insurance disputes refer to those disputes that someone has with their own insurance company (as distinct from a “third-party” dispute, which is a dispute with someone else’s insurance company).
There are numerous types of first-party insurance disputes. These disputes usually involve issues about insurance coverage for a given claim, or the appropriate amount of compensation due and owing for a given claim, or both.
In the context of homeowners’ insurance, the disputes that we see most often involve a disagreement over what a given claim is worth; for example, the amount required to repair one’s home following a fire and/or to purchase replacement items damaged in a fire or by some other covered peril. Sometimes, a dispute arises over whether a certain type of loss is or is not covered (in our experience, water damage-related claims are most often the subject of coverage denials).
In the context of auto insurance, there are numerous types of first-party insurance disputes that arise. “PIP” is the acronym for the “Personal Injury Protection” benefits that are included in all personal auto policies written in the state of Oregon. This is a “nofault” type of coverage that applies to medical treatment costs and income loss (see our separate webpage discussing personal injury protection benefits and issues in more detail). Insurance companies are very aggressive in trying to limit their PIP benefits payments. The typical scenario is for an auto insurer to demand that their insured attend an “Independent Medical Examination” as a condition to the insurance company continuing to provide PIP Benefits to the insured. In theory, the physician conducting the examination is, in fact “independent” and employs that objectivity to determine whether additional medical care would or would not be “reasonable and necessary.” Unfortunately, in our experience, accumulated over decades of work in this industry, the physicians whom the insurance companies hire to perform these examinations are not neutral and objective; instead in the very substantial majority of these cases, the physicians conclude (and the content of their reports is very predictable) that no more care is warranted, and the insurance company then relies upon that opinion to deny paying further benefits. (Interestingly, the insurance companies tend to use the same fairly small group of physicians to perform these exams, over and over again).
When an insurance company denies a claim as just described, the insured does have some options, and rights, as does the homeowner whose claim has been denied by their insurer and/or when the insurer won’t voluntarily pay fair compensation to their insured (i.e. if a dispute arises over the replacement value or fairmarket value of an item destroyed in a covered loss).
ORS §742.061 is an Oregon law that applies to many “first-party” insurance disputes. It is an attorney fee statute. Summarizing and condensing, pursuant to this law if a first-party insured provides adequate proof of loss of their claim to their insurance company, and offers to resolve the claim for a specific amount of compensation, the insurance company has six months to perform their investigation and pay the claim and if they do not, the insured person can file suit seeking both the amount of compensation that they offered to settle for and also their attorney’s fees. In this context, attorneys fees are charged (to the insurance company) on an hourly fee basis and the total fee can be quite substantial by the time the trial in the case is complete. The “threat” of the award of attorneys fees in addition to the compensation being sought is intended to cause the insurance company to be more reasonable in evaluating a given claim, and paying fair money to resolve it. In my experience which includes having worked for one of the largest U.S. insurance companies and the years that I spent working for law firms that defend insurance companies, albeit many years ago this attorney fee statute is invaluable to “the little guy.”
Oregon law (referring to Oregon appellate court decisions) is, presently evolving, in terms of what constitutes a legally sufficient “proof of claim.” Links to some of the more recent court opinions can be found at the bottom of this page. Because of this, it is very much in your best interest to retain counsel to protect and represent your interests when it comes to first-party disputes with your insurance company. At Phillip C. Gilbert & Associates our attorneys have decades of experience handling first-party insurance dispute cases.