Oregon Underinsured Motorist and PIP Law Changes Benefit Injured Victims
The Oregon Legislature recently passed, and Governor Kate Brown signed into law, a bill that dramatically improves the landscape for Oregon victims injured in motor-vehicle collisions. The bill has two components: a change to Oregon Underinsured Motorist (UIM) law and a change to Oregon’s Personal Injury Protection (PIP) law. These changes go into effect for all policies renewed or created from January 1, 2016 forward. In other words, if you are injured in a collision on January 1, 2016, but your policy was renewed on December 31, 2015, you will not be able to take advantage of the following beneficial changes to the law. Because of this, all insured Oregon drivers should contact their insurer and ask that their policy renewal take place on January 1, 2016.
The UIM change allows for what is commonly called “stacking.” Stacking allows an injured motorist to add their UIM coverage on top of the at-fault driver’s liability coverage. To put this into context, let’s assume you have an injured motorist who purchased the minimum required auto insurance policy in Oregon, which provides $25,000 in liability and UIM coverage. This hypothetical injured motorist is then in a car crash and suffers significant injuries. Because of this, the injured motorist has a personal injury claim worth more than $25,000. Now, let’s assume the at-fault driver has the same minimum insurance coverage. Because Oregon law currently doesn’t require stacking, the two minimum policies effectively cancel each other out—meaning the injured victim cannot access his own UIM policy, and can instead only make a claim against the at-fault driver’s minimum policy.
Because of the upcoming change in Oregon’s UIM law, the same hypothetical injured driver can make a claim against the at-fault driver’s liability policy (i.e. $25,000) and then stack his own UIM policy on top of this (i.e. an additional potential $25,000). In other words, prior to this change in law, the injured driver was not able to make a claim against their own UM policy, for which they had paid premiums. But, now (so long as they entered into a new or renewed an existing policy after January 1, 2016) the injured driver can.
The importance of this change in law is clear. It will first and foremost provide critical assistance to victims of severe motor-vehicle collisions. But, it also has the important benefit of ending the insurance industry’s practice of effectively selling minimum coverage insurance policies on which Oregon consumers could never collect benefits. According to the Oregon Trial Lawyer’s Association, approximately 500,000 of these “no-claim” policies have been sold to mostly low-income Oregonians. Because of this change in law, Oregon consumers and injured motorists will be better protected and potentially receive the coverage they paid for.
As mentioned above, the law also provides for significant changes to Oregon’s PIP law. Among other things, PIP insurance provides medical benefits (i.e. pays for the cost of an injured motorist’s medical care), and may pay wage loss for injured motorists who cannot work for more than two weeks because of a collision. The change here ensures that injured motorists are able to recover their total damages first, before their insurer gets paid back for any PIP benefits it has provided.
This change, commonly referred to as the “PIP make whole” rule, forces a PIP insurer to waive its entitlement to reimbursement when an injured motorist’s total damages exceed the amount of benefits they receive. Prior to this change, PIP insurers could assert a right to reimbursement for benefits it provided in certain circumstances that were detrimental to injured motorists. This was primarily because the measure of reimbursement that a PIP insurer could demand was based not on the entirety of an injured motorist’s damages, but merely on the injured motorist’s economic damages. The previous measure did not account for an injured motorist’s pain and suffering when determining whether PIP should be reimbursed. Now, because of this change, the court must take into account all of an injured motorist’s damages when determining whether a PIP insurer gets paid back from money that otherwise would go to the injured person.
In addition, the law extends the period of time that an injured victim has access to their PIP medical benefits. Prior to the change in law, PIP medical benefits only lasted up to one year from the date of injury. Now, PIP medical benefits will last for up to two years after the date of injury. Again, both of these PIP changes will only be in effect for auto insurance policies entered into or renewed from January 1, 2016 forward, unless an existing policy has rider language in it automatically incorporating these beneficial changes.
The Law Offices of Michael L. Rosenbaum have assisted injured motorists for over thirty years. We have represented thousands of such clients. If you or someone you know has been injured in a motor-vehicle collision, call us today for a free consultation.