Senate Bill 411

The legislature has passed, and the Governor has signed, a new piece of legislation that will change the auto insurance landscape in Oregon beginning January 1, 2016. The changes are significant, and have the potential to be life altering for injured Oregonians going forward.

UIM “Stacking”

“Underinsured motorist” coverage is an important part of any auto insurance policy. If you are seriously injured through the fault of another driver, and their liability insurance is inadequate to cover your damages, your own UIM policy takes over. However, under current law, your UIM will only pay to the extent that your purchased coverage exceeds the coverage of the at fault driver. In other words, if the other driver has $25,000 in coverage, and your UIM policy likewise provides $25,000, your policy pays nothing. This counter-intuitive result has finally been changed.

Under the new law, using the above example, the injured driver’s UIM policy would be available to compensate for damages over $25,000. The UIM coverage will “stack” on top of the at-fault driver’s coverage, making $50,000 available. For someone facing medical bills and lost wages resulting from a serious accident, this will make a big difference.

PIP Reimbursement

PIP, or “personal injury protection,” is Oregon’s version of “no fault” auto coverage, and is a mandatory part of all auto policies in the state. If you are injured in an accident, your own PIP coverage takes care of the initial medical bills and wage loss, regardless of who is at fault. If the other driver is later deemed responsible for your injuries, your insurance company is entitled to reimbursement from whatever settlement you eventually recover. This reduces the amount of money available to the injured person.

Under current law, PIP reimbursement is not available until all the injured driver’s economic damages are compensated. Unfortunately, non-economic damages are often a big part of an auto accident claim, but PIP is reimbursed before non-economics are paid. Under the new law, there will be no PIP reimbursement until ALL the injured person’s damages are taken into account. This will allow injured Oregonians to receive fair compensation for their injuries, and put their PIP carriers behind them in line for funds which are often inadequate to cover all their losses.

How to Take Advantage of the Changes

In order to benefit from the new law, it is essential that your auto policies are either new, or renewed after January 1, 2016. It may be a good time to switch carriers altogether in the new year, as studies have shown loyal insurance customers are often penalized for that loyalty with higher rates.

The changes embodied in SB 411 are too important to ignore. . .make plans to renew or get a new auto policy as close to January 1st as possible.