Work Groups: Automobile Insurance
- John Bachofner
- Joel Devore
- Dean Heiling
- Neal Jackson
- Richard Lane
- Tom Mortland
- Stephen Murrell
- Justice Edwin Peterson
- Dave Barrows
- Lana Butterfield
- Toni Chodrick
- Paul Cosgrove
- James Gardner
- Brian Miller
- Shawn Miller
- Teresa Miller
- David Monaghan
- Michael Morter
- John Munro
- John Powell
- Louis Savage
- Lana Smith
- Wendy Johnson, Oregon Law Commission
- Lisa Ehlers, Oregon Law Commission
- Susan Grabe, Oregon State Bar
2007 Legislative Session
The Automobile Insurance Work Group proposed two pieces of legislation for the 2007 Legislative Session. Both were passed by the legislature and signed by the Governor.
HB 2384 was intended to be a house-keeping fix to address a portion of SB 925 from the 2005 legislative session. The problem with the version of SB 925 (2005) is that it omitted three words meant to be included in ORS 742.504(9)(b) when the final version was passed. The statutory provision created a presumption that the insurer's liability would not exceed the maximum limits for liability on the individual policies, whether they be primary or excess. The omission of these words created a situation where the limits of the insured's damages were deemed not to exceed the liability limits of the additional primary or excess insurance, but not of the UM/UIM insurance in question. The problem with the language in SB 925 is that the insurer's liability can exceed that of the UM/UIM policy, but not that of the additional primary or excess insurance policy. The addition of "this insurance or" after "applicable limits of liability of" allows the limit to apply to both insurance policies, thereby resolving the conflict. SB 925 (2005) was meant to have passed with the proposed language, but the three words were unintentionally omitted.HB 2385 addressed two problems with automobile insurance coverage caused by self-insured vehicles. First, this bill requires self-insured vehicle owners to provide coverage, meeting the statutory minimum Financial Responsibility Law requirements, for their permissive users. In essence, this bill will require self-insurers to mirror the coverage that ordinary automobile insurance policies must provide for permissive drivers. ORS 806.080(1)(b).
Second, this bill allows persons who are unable to recover the full amount of their damages (i.e. their damages exceed the Financial Responsibility Law minimum requirements) to collect through their own uninsured or underinsured motorist (UM/UIM) coverage. Previously, the UM/UIM statute declared that self-insured vehicles can never be uninsured vehicles for purposes of UM/UIM coverage. ORS 742.504(2)(e)(B). Thus, if you were struck by a self-insured vehicle, you could not recover from your own UM/UIM coverage. Even if the adverse driver was uninsured, your own policy's uninsured motorist coverage would not pay.
2005 Legislative Session
At the prompting of several sources, the Oregon Law Commission's Program Committee identified Oregon's auto insurance statutes, particularly the uninsured and underinsured motorist provisions, as a subject for inquiry. See ORS 173.338(1) (Commission to discover defects and anachronisms and recommend law reform).
In 2003, an Auto Insurance Study Group considered 22 issues and prioritized the topics for remedial legislation. Nine issues were deemed the highest priority. On February 27, 2004, the Oregon Law Commission approved the creation of a Work Group. On April 29, 2004, the Work Group found consensus on five particular problem areas to address for the 2005 Legislative Session. The Work Group agreed that any remedial legislation should be segregated into separate bills to promote passage and to avoid "gut and stuff" changes. On October 27, 2004, five bills were recommended by the Work Group for consideration by the full Oregon Law Commission. This proposed bill involves two interrelated issues arising from self-insured vehicles.
On November 19, 2004 The Oregon Law Commission moved that the following bills be presession filed with the Joint Interim Judiciary Committee at the request and with the recommendation of the Oregon Law Commission. The accompanying reports were also all approved for submission to the Legislative Assembly.
(Bill is in House of Representatives.) Senate Bill 922 requires self-insureds to provide payments, meeting the Financial Responsibility Law requirements, for permissive users. (The permissive user's insurance will pay if the user does have insurance.) Second, if struck by a self-insured vehicle, and all of one's damages are not paid, one's own underinsured motorist coverage will apply.
SB 923 Report (PDF) & Enrolled SB 923 (PDF)
Senate Bill 923 assures that when multiple claimants divide the wrongdoer's "per accident" liability insurance limit into small amounts (25/50K minimum limits policy), that an injured claimant may rely on the claimant's own underinsured motorist coverage for the balance of their "per person" limit.
Senate Bill 924 provides that when one's car is stolen, it can be treated as an uninsured car so that the owner has a remedy in their own uninsured motorist policy. The bill also requires the reporting of a stolen vehicle to police and cooperation with police to prevent insurance fraud.
Senate Bill 925 is a cleanup of ORS 742.504 and simply states clearly that when an insured is in one's own car, one's own policy coverage is primary, but when driving someone else's car, the policy coverage is excess and the other car's policy is primary.
Senate Bill 926 addresses the problem of insurers that become insolvent two or more years after an accident. The bill takes out the two year limit on bankrupt insurers for the purposes of the definition of "uninsured vehicle."