Did you know you have been paying for underinsured motorist coverage as part of your auto policy? The purpose of underinsured motorist (UIM) coverage is to protect you if you are injured by a driver without enough insurance. For example, the minimum auto insurance liability limit required by Oregon law is $25,000. So what if you got hit by someone within minimum liability limits of $25,000? You would think that is exactly when underinsured motorist coverage would protect you.
Currently that is not the case. Let’s say, for instance, you are hit head on by a car going the wrong way down a one way street. Not only is your car badly damaged, but your leg is also broken and you have had to miss a lot of work. You have medical expenses and lost wages. The bad driver’s insurance gives you $25,000, well short of your total damages. Luckily, you have a $25,000 UIM policy.
But guess what? Insurance companies in Oregon have been subtracting the amount of the bad driver’s insurance from the amount of UIM coverage you paid for. The driver’s $25,000 minus your $25,000 leaves you with no underinsurance coverage.
However, in mid-March, the 78th Oregon Legislative Assembly passed Senate Bill 411 (SB 411), designed to protect consumers by prohibiting insurance companies from subtracting the liability limits of the bad drive that hit you. Starting January 1, 2016, SB 411 makes it illegal for your insurance company to subtract the amount of the bad driver’s insurance policy from your UIM coverage. Using the above example, now you can recover the $25,000 from the bad driver and get the $25,000 of UIM coverage you paid, totaling $50,000. Should you and the bad driver’s policies both be $100,000 or $250,000, the available insurance would be $200,000 and $500,000 respectively. Finally, you get the full benefit of the UIM coverage you paid for.
At Kafoury and McDougal, we have routinely secured the owed UM/UIM benefits for those who, unfortunately, find themselves in accidents, such as D.T. While crossing the intersection of Highway 30 and E. Colombia Avenue, D.T. was struck by an uninsured driver who sped around another car to run illegally through the light. Our firm brought a suit against her insurer after they failed to offer even a cent of her UM benefits. In spite of the insurer’s claims that D.T. should have seen the oncoming car and not entered the crosswalk, we received a unanimous decision from a three-member panel of arbitrators against the insurance company. As a result, D.T. was rewarded the full amount of her rather substantial uninsured motorist policy.
Under the new Oregon legislation UM/UIM policies are more useful than ever. However, SB 411 only benefits coverage acquired, or renewed, as of the first of January 2016. We urge Oregon drivers to take advantage of this new legislation and increase their UIM insurance. The State of Oregon has protected consumers by requiring insurance companies to provide the fullest coverage possible under UIM insurance, now it is up to you to take advantage of it.