Introduction
We recently conducted some informal research to determine how many people are actually driving around Oregon without auto insurance. Although our estimates are rough, we figured as many as 25% of Oregon motorists are driving without insurance.
Even those who comply with the law and carry auto insurance may not have sufficient coverage for the harm they cause. Oregon statute has a "financial responsibility" law that requires every Oregon motorist to carry auto insurance. A related statute requires insurance companies to provide minimum coverages.
Although there have been some recent improvements in the mandatory insurance statutes, for several decades, an Oregon motorist can carry as little as $25,000.00 in liability coverage. This means that no matter the extent of injury that motorists causes, there is only $25,000.00 to cover all losses from a single claim that arises from a serious personal injury.
Over the same several decades, the cost of medical care alone has skyrocketed, and we find more frequently our clients are injured by people without insurance, are not enough insurance. In this article, we discuss uninsured and underinsured motorist coverage and claims.
Some Basics
An Oregon auto insurance policy is a contract that offers different coverages. State law requires the insurance companies to provide certain kinds of coverage and minimum amounts of coverage.
This article focuses on the uninsured and underinsured motorist coverages and claims. However, it makes sense to go through some of the basic coverages here.
Liability Coverage:
Liability coverage is coverage for your liability if you because an injury to someone else when behind the wheel. This coverage is for any claims that are made against you for property damage or personal injury. Currently, you can carry as little as $25,000.00 in liability coverage as we discussed above. The kind of losses this covers include medical expenses, lost income, and non-economic damages like pain, suffering, loss of enjoyment of life and permanent injury.
Personal Injury Protection:
Oregon statute also requires insurance carriers to provide personal injury protection coverage. This is a no-fault medical and disability policy that replaces wages and pays medical expenses. This coverage is available if you are injured in a motor vehicle collision, even if it is your fault, or nobody's fault. The medical benefit covers any accident related medical expenses incurred within two years of the collision. The disability benefit will cover lost income if you are disabled from work for at least fourteen consecutive days. The benefit pays 70% of your average wage, but there is a monthly cap on the amount of benefits paid per month.
Other personal injury protection benefits include loss of domestic services and child care.
Property Damage:
There are a couple of potential "buckets" of coverage for property damage. Under your liability coverage (see above), you are covered for any property damage you cause if you are careless and damage and other motorist's vehicle or even their personal property.
You also may have comprehensive/collision coverage on your car, which provides repair or replacement coverage regardless of the cause of the collision or damage to your car.
Finally, you may have a form of uninsured motorist property damage coverage. This coverage comes into play if your car is damaged or destroyed by an uninsured or underinsured motorist. This is similar to the bodily injury uninsured/underinsured motorist coverage that is the subject of this article.
Uninsured Motorist Coverage
"Uninsured motorist" coverage is coverage against the uninsured. If you are injured in an auto collision and the other driver did not have enough insurance to cover your losses, or had no insurance at all, you have an uninsured or underinsured motorist claim. Essentially, your insurer jumps into the shoes of the insurance company for the at fault driver. You can then make a claim for any losses that you could have recovered from the other driver had they had insurance or sufficient insurance coverage.
This coverage is not automatically available. You must go through certain steps and meet certain requirements to make an uninsured motorist claim.
There are other special categories of uninsured motorist claims including the "phantom vehicle" and the "hit and run" claim. In this article, we do not dive into the special requirements, but they involve time limits in reporting the phantom vehicle or hit-and-run incident, and in some cases, objective evidence of the event. There may also be special requirements regarding the filing of a police report.
Underinsured Motorist Claims
Underinsured motorist claims work just like uninsured motorist claims. The only difference is that the at fault driver was insured, but not for enough to cover the harm you suffered as a result of the collision. In these cases, there are an additional layer of requirements involving resolving the claim with the other driver's insurance company.
One requirement is that you must obtain a "policy limits" offer from the other party's insurer. The policy limit, as explained above, is the amount of coverage that a motorist carries for their liability. If you receive a policy limits offer, you must then obtain proof of the coverage available, and present that to your insurance company to seek approval of the liability insurance settlement with the other driver's insurance company.
You must be careful in resolving your claim against the at fault driver for a few reasons. The at fault driver may have other available coverage like an "umbrella" liability policy. Also, there may be other potentially responsible parties that you wish to pursue a claim against, or at least investigate. In general, if you release the at fault driver from liability with a traditional settlement release agreement, you may be releasing other potentially responsible parties from their liability as well.
However, if you meet the requirements of the underinsured motorist claim (approval of a policy limits offer), then you can pursue your underinsured motorist claim against your insurance company. When reviewing a demand for settlement of an underinsured motorist claim, the insurance company will consider the amounts he recovered from the other insurance company (the liability settlement) as well as the amount of personal injury protection benefits that were provided for medical care or disability. There are complicated rules that determine whether your insurance company gets a credit for any of the personal injury protection benefits that it paid and how liability insurance settlements are considered in making an offer or negotiating a settlement on the UIM claim.
If the underinsured motorist claim does not resolved by settlement, you can file a lawsuit against your insurance company in state court and request a jury trial. You can also agree to a binding arbitration with your insurance company. Keep on reading to find out about arbitration and trial.
Making the Claim
After submitting all your supporting documentation to your insurance company, the claim is evaluated, and there may be negotiations. The insurance company will deny coverage, or make an offer of settlement. In our office, we review all settlement offers with our client is required, and them will decide how to respond. We may continue to negotiate with the insurance company to resolve the matter, or decide to move forward to the next level of appeal.
Choices of Appeal
All Oregonians have a right to a jury trial if the amount in dispute meets the constitutional threshold. As a result, you have a choice on how to appeal your uninsured or underinsured motorist claim
If you are unable to resolve your claim, the next step is to either file a request for arbitration, or file a lawsuit directly against your insurer in state court. This is like any other lawsuit, except the defendant in the lawsuit is your insurance company. You can try this claim before a judge and a jury. However, the rules of evidence are more strict, and live expert witness testimony is typically required. In some cases, if the insurance company does not follow the requirements of the uninsured motorist statute, you may also be able to seek attorney fees in pursuing the claim in court. However, this does not occur very often.
If you decide to file your uninsured or underinsured motorist claim in state court, the case is set for trial in the county where you filed the lawsuit. Before the trial date, each party will exchange information before the trial date. This is known as "discovery."
There are different kinds of discovery. Each party will typically file a request for documents which is called a "Request for Production." Typically, the plaintiff (the injured party making the claim) will provide medical records, medical bills, and documentation supporting any lost income claims. The injured party will also be asked to provide other information like health care coverage, information about prior similar injuries or claims. The insurance company will often provide accident reports, statements, a copy of the applicable insurance policy in response to a request for documents.
The injured party will also submit to a "deposition." A deposition is sworn testimony that is provided before trial. The insurance company attorney, with your attorney present, will ask you questions after you have been put under oath. The insurance company attorney can ask questions about any matter that is "reasonably calculated to lead to discovery of relevant evidence." This means that the defense attorney can ask questions about things that may not necessarily be relevant at a trial, but could lead to something relevant. We often tell our clients that the defense attorney is allowed to go on someone of a "fishing expedition" to learn more about your medical history, especially if you had injuries to the same part of the body or similar injuries in the past.
Another form of "discovery" is the "independent" medical examination. Technically, the insurance company attorney will have to file a motion with the court establishing that there is "good cause" to require that you attend an examination or front of a physician of its choice. However, because courts will almost always grant this motion, the parties will usually agree to an independent medical examination with some conditions. Also, because this is an uninsured or underinsured motorist claim, the insurance contract will require that you attend examinations at the insurer's request. Still, there could be some room for the parties to argue to a court about the conditions of an examination.
Going to Arbitration
An arbitration is essentially an informal trial. The insurance policy and the Oregon uninsured motorist statute dictates how arbitrations work. Generally, you have the right to select your own arbitrator. The insurer has a right to select its own arbitrator. After each party selects their respective arbitrator, those two arbitrators will confer with each other and recommend third "swing" arbitrator. The "swing" arbitrator is often a professional arbitrator and mediator. These folks are attorneys who focus a large part of their practice on arbitration and mediation, or may be a Senior Status Judge that offers their service as an arbitrator and mediator.
Once the arbitration panel is established, the parties schedule an arbitration date. Prior to the arbitration date, each side will engage in the exchange of information before arbitration. Lawyers and Judges call this "discovery." There are different forms of discovery, including the exchange of documents, a deposition, and an "independent" medical examination.
Prior to the arbitration, each party will provide a packet of exhibits to the arbitration panel. Exhibits are one form of evidence that the arbitration panel considers in evaluating your case. The other kind of evidence is witness testimony.
When the arbitration occurs, it is like an informal trial. When we say "informal," we mean that it is less formal than an actual court trial. There are still strict requirements like deadlines for submitting exhibits, and application of the rules of evidence. However, some rules of evidence are relaxed. For example, we do not need to have a physician or other expert witness testified live at the arbitration panel. Instead, we may choose to submit an expert opinion by affidavit or declaration. There are advantages (cost) in submitting a written opinion. However, because the expert is not subject to cross-examination, the arbitration panel may not give that expert opinion as much weight as if the expert had made themselves available to cross-examination. This decision is made on a case-by-case basis.
An arbitration in many respects is like a trial. The attorney for each side of the arbitration will make an opening statement. After opening statements, the injured party (often referred to as the "petitioner"), can call witnesses. Those witnesses are sworn in, and then answer direct questions from the petitioner's attorney. After giving testimony to the petitioner's attorney, the insurance company's attorney can cross-examine the witness.
After the injured party has calledall of their witnesses, the attorney for the injured party will "rest their case." Then, it is the insurance company's turn to put on their case.
In many Oregon uninsured motorist arbitrations, the insurance company attorney will often call a physician as an expert witness. The physician may have not examined our client, but instead will review medical records and imaging studies, as well as deposition transcripts or accident reports to provide an opinion. In many cases, the insurance medical expert will testify about the nature and extent of the injuries our client sustained and whether or what medical care was necessary to treat the injuries. Often, the main issue a medical expert addresses is whether our client's injuries our permanent and will cause some impairment in the future.
After the insurance company attorney has called all their witnesses, the injured party's attorney can put on a "rebuttal case." A rebuttal case is the calling of witnesses that rebut or argue against the testimony of the defense witnesses. A rebuttal witness may be our client, or a physician or other expert that rebuts the opinion of an insurance company physician's testimony.
After injured party's attorney is finished with calling rebuttal witnesses, all of the evidence is in, and the "record" is closed. The "record" is all of the evidence (exhibits and testimony) that the arbitration panel will consider in evaluating the case.
When this happens, each party is permitted to provide a closing argument. The injured person's attorney first provides a closing argument. The insurance company then argues its evidence, and finally, the injured person's attorney gets to make a rebuttal argument.
After arguments are completed, the parties and their attorneys leave, and the arbitration panel will deliver a much the same way a jury does when a case is tried in court.
The presiding arbitrator will then issue an "award letter." The award letter may be detailed or may be very straightforward listing only the amounts awarded.
Trial or Arbitration?
As most attorneys like to say, "it depends." Each has the pros and cons.
Overall, arbitrations are more efficient. The parties are more in control of scheduling and selecting the decisionmakers on the case. Also, because the court rules that govern arbitrations are more liberal, it is generally less expensive to put together a case for arbitration. Finally, the arbitrators who usually decide these cases have extensive experience with injury claims, and the results are generally more predictable.
We have also tried uninsured and underinsured claims in front of juries. Unlike a claim against an insured or sufficiently insured driver, the jury is aware that the true party in the litigation is an insurance company. Therefore, the defendant is not permitted to "hide behind" the rules that forbid mention of the existence of insurance.
Juries may relate to the experience of the injured party, and understand the real-life impact of a severe and life changing injury. However, the rules of evidence are more strict, and the cost of litigating an uninsured or underinsured claim in front of a jury is far more expensive than trying the case to an arbitration panel.
In either case, there are limits or "ceilings" on the amount you can recover in an underinsured or uninsured motorist claim. Unlike a lawsuit against another driver, this is a contract dispute. The contract at issue is the insurance policy. That insurance policy sets out "limits" on how much money can be paid for a certain claim. Thus, you may be able to prove extensive losses and harms that far exceed the amount of insurance coverage available. However, with the exception of certain waivers of reimbursement to other insurers, you can only recover a finite amount regardless of the severity of your injuries.
Common Issues with Uninsured and Underinsured Motorist Claims
In many respects, the issues we face with uninsured and underinsured motorist claims in Oregon are similar to personal injury claims made against the insured motorists or sufficiently insured motorists. Those include proving liability, the extent of damage and harm, and the connection between the two.
Set Offs or Credits
Also, to each claim are the issues of how the insurance policies interact with each other. However, there are insurance issues unique to underinsured and underinsured motorist claims. For example, in an uninsured or underinsured motorist claim, the insurance company is entitled to a credit for personal injury protection benefits provided. However, there are certain cases where this "credit" may be waived.
In underinsured motorist claims, the insurer was traditionally entitled to a "credit" for the amount of the underlying liability insurance settlement (settlement recovery from the other at fault driver's insurance company). However, recent changes in the law allow you to "stack" the amount recovered from the underinsured motorist claim on top of the amount covered from the other driver's policy limits settlement. Still, there may be an offset or reduction depending upon recovery made at trial or arbitration on and underinsured motorist claim.
Health Insurance
We often deal also with claims for reimbursement from private health plans. Private health plans will get involved in covering medical expenses a more serious injury claims because the amount of medical coverage available under the personal injury protection coverage in an auto policy is often limited to the statutory required coverage of $15,000.00. Even where the personal injury protection provides additional coverage, serious injury claims will often involve tens of thousands or even well over $100,000.00 in medical expenses. The rules governing reimbursement to health plans out of settlement or recovery are different them with reimbursement to auto policies that cover medical expenses or lost wages.
Questions?
There are a lot of moving parts involved in pursuing a serious uninsured or underinsured motorist claim. call us or contact us with your questions. We can help you know where you stand. If we are not able to help you, we can point you in the right direction.
