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New Oregon Law improves UM UIM Auto Insurance Coverage IF your policy is issued or renewed on or after January 1, 2016!

Very Very Important - All Oregonians will want to make sure their automobile policy is technically renewed or issued as close to January 1, 2016 as they can get it done.  Why?  

Well there was a new law passed this year that goes into effect as of January 1, 2016.   Known as Oregon Senate Bill 411, or referred to by us attorneys as the "UIM stacking legislation", this new law will actually improve your auto insurance coverage if your policy is  issued or renewed on or after January 1, 2016.   The law specifically increases the protection you have if you are in an accident where the other driver is at fault and the other driver's insurance is less then your insurance coverage or the other driver doesn't have insurance.

By law all auto insurance policies issued in Oregon have always been required to include a minimum amount of coverage called UM/UIM which is what pays your personal injury damages when the other driver has no insurance of lower insurance coverage limits. (Think of UM/ UIM as "under-insured" or "uninsured motorist protection") Currently all Oregon Auto Insurance policies must contain coverage of at least $25,000 per person/ $50,000 per accident.  (This means all policies will pay up to $25,000 to each individual that makes a claim but no more then a total of $50,000 for all payments made to all persons involved in the same accident.)  

Prior to this new law, the mandatory UM/UIM insurance, included in your automobile policy, usually did not pay you the full amount that the policy said it would pay.  This is because the law as, previously written, allowed your insurance company to first consider how much insurance the other driver had available to pay you, and count that insurance first, and then only pay you the difference. 

For example, if your UM/UIM coverage, that you had paid premiums to have, was say, $100,000.00, and you were in an accident where the at fault driver had $50,000 of liability coverage, you might think that you can expect both the $50,000, plus the $100,000, a total of $150,000, to be the total amount of funds to pay your damages.  (Assuming your injuries were such that you deserved that level of damages.)  But under the current law, your insurance company would tell you that you only have a maximum of $100,000 available consisting of the $50,000 from the other driver's insurance plus $50,000 more from your policy.  You don't get the full $100,000 you paid for on your policy because they treat the total amount as a guarantee of the amount you will get, including what you get from the other driver, so they don't have to pay you what you can get from the other driver.

This all changes as of January 1, 2016.  You will now legally be entitled to get, under the above example situation,  both the $50,000 from the at fault driver plus your full limit of $100,000 for a total of $150,000.   (Again, you have to still prove that your injuries are worth the full $150,000, but assuming you can do that, you have a larger fund to draw from.)   THE CATCH IS: The new law will not apply to you until your policy is actually renewed or newly issued in 2016!  So don't wait for your actual renewal date sometime later in 2016.  Call you insurance agent and find out what you can do to trigger an earlier renewal.



3 Comments to New Oregon Law improves UM UIM Auto Insurance Coverage IF your policy is issued or renewed on or after January 1, 2016!:

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Jack Sharpe on Saturday, December 26, 2015 12:01 PM
Will this new legislation effect my premiums?
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Joanne Reisman, Attorney at Law on Saturday, December 26, 2015 8:56 PM
Hi Jack, thanks for your comment. May I assume that you are in Oregon? This legislative change is only effecting Oregon Law and Oregon Auto Insurance Policies. In answer to your question, the change of the law doesn't directly cause a change in your premiums. Insurance companies set premiums based on their underwriter's analysis of how much they will take in from all of their customers paying premiums, how much they can make investing the premium money in stocks, bonds, and other investments, and how much they expect to pay out in total $$ for future insurance claims. If the change in the law results in more claim dollars being paid out than the insurance company expected the last time they set your premium, which could happen, there could be some future increases to your premium, but the increases would be shared by all people paying premiums to help share the total cost, so your share of the increase should be small. You are already paying a premium for your uninsured/under insured motorist protection that you already have on your policy. It's just that you usually couldn't collect the full amount of the benefit that was on your declaration page because your insurance company would first offset the amount that you could collect by subtracting the amount you already collected from the other driver. So if both you and the other driver had $25,000 coverages (the other driver's liability policy and your UM/UIM policy), then you only be able to get a total of $25,000.00 from the other driver and nothing from your policy, even though you paid premiums to have $25,000 coverage. Since most drivers care the required minimum liability and the required minimum UM/UIM, the result was that the UM/UIM portion was usually not collectible. (True, this probably meant less being paid out on insurance claims by your insurance company as well, so this may have been reflected with a lower premium.) Now, you would be able to get $50,000 by collecting from the other driver $25,000 then collecting $25,000 from your own insurance company. So that would mean more money being paid out overall by your insurance company then before the law changed. However there are random factors that could offset this. For example, if the driver that hits you has a $50,000 in liability insurance, and your cliam is only worth $50,000, then the claim would be 100% paid by the other driver's insurance, so your insurance company doesn't experience paying more on that claims due to the new law. Consider as well that most car accidents are small accidents with minor injuries, so most accidents won't cause a situation where the insured drivers have to use their UM/UIM coverage for funds above what they can collect from the other driver. Currently there are developments in the auto industry that should reduce the overall number of accidents and the seriousness of the resulting injuries. Many new cars now have detectors that detect possible collisions faster than a human driver can and the cars start to brake or take other evasive measures automatically. Cars are being built with rear view cameras that will prevent accidents when backing up. Self driving cars are already being tested. So while your available coverage is increased by this new law, the odds that you will need to make a UM/UIM claim will be decreasing. I can't specifically predict what will happen, but the odds are that there will be little or no impact on your premiums as a result of this law change. Joanne Reisman Attorney at Law


Billy Turner on Wednesday, January 06, 2016 9:34 AM
Thanks for sharing this information, I did not truly understand this new law until now
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