New Oregon Insurance Law Provides Benefits To Car Accident Victims

Changes impact both PIP and UIM insurance.

The Oregon Legislature enacted a new law that directly impacts Uninsured and Underinsured Motorists (UIM) and Personal Injury Protection (PIP) Insurance policies. The law, which went into effect in January of 2016, is intended to help better ensure that victims of accidents receive the full compensation they are entitled to by their insurance policies. Victims of these accidents can benefit from having a basic understanding of how this change could impact their claim.

UIM updates: Ability to stack coverage

The change does not impact the minimum amount of UIM coverage that drivers are required to carry. That amount remains at $15,000. However, the change does impact the overall amount of payment an accident victim could receive due to a new ability to "stack" payments. The change is best illustrated with an example. In a car accident resulting from another driver's negligence that resulted in $50,000 worth of damages to the victim where the liability of the other driver was found to be $25,000, the victim's UIM coverage under the old law would only be the difference between these two amounts. In this example, that translates to $25,000 from the negligent driver's liability and $25,000 from the victim's own UIM insurance policy coverage for a total of $50,000.

The new law changes how this is calculated. Instead of allowing only for the difference between the two amounts, the victim can receive his full insurance policy coverage amount in addition to the negligent driver's liability amount. In this example, that translates to the $50,000 coverage amount plus the $25,000 liability payment, or $75,000 total.

PIP updates: Extended time for payout and reimbursement changes

The second impact of this law involves the amount of time a victim has to receive coverage under a PIP policy. Originally, coverage was available for one year following the accident. This change doubles that time, allowing for medical coverage regardless of fault to be covered for two years. This means any medical expense that was necessarily and reasonably incurred as a result of the motor vehicle accident up to two years following the accident should be covered.

The second impact to PIP coverage involves the reimbursement procedure. Originally, this system involves a review of two factors: the victim's total benefits paid and the economic damages of the accident. The total benefits paid are the payments made by the insurance provider under PIP, UIM and liability insurance policies. The economic damages are the medical bills and other verifiable costs associated with the accident, which can include lost wages. The changes can best be described with an example. In this example, a victim was injured in an accident with total economic damages of $35,000. The victim received $10,000 in PIP payments from his insurance policy. After the case settles, he receives a $25,000 settlement. Under the original law, the accident victim would have to reimburse his insurance company the full $10,000. If the attorney did not cut their fee to reflect the PIP reimbursement amount, this settlement would be further reduced by 1/3 of the original amount, translating to an additional $8,333 payment. Overall, the victim would receive a final settlement award of only $6,667.

Under current law, this payment changes substantially because the PIP insurance provider gets reimbursed only to the extent that the victim's total benefits paid exceeds his damages, non-economic like pain and suffering as well as economic damages. Applying this new law to the same example, the victim would not have to make any payment to the PIP insurance provider. Why? The total benefits are $35,000 (the $10,000 PIP payment plus the $25,000 settlement). Since the total payment does not exceed the victim's damages, he does not owe the insurance provider reimbursement.

Changes highlight need for legal counsel

This change highlights the need for an experienced car accident attorney. Without this information, a victim of a car accident may not be aware of his or her rights regarding insurance policies. Furthermore, this update showcases the evolving nature of personal injury law. Changes can occur at any time, and these changes can impact your case. Contact an experienced car accident attorney to help better ensure your legal rights and remedies are protected.