Oregon law requires that motorist carry uninsured motorist coverage. This is a good thing because a recent Oregon Department of motor vehicle report showed that 25% of those involved in reportable accidents did not have insurance. This article explains how uninsured motorist and underinsured motorist claims work, and the difference between the two.
Uninsured Motorist Coverage
Uninsured motorist coverage is coverage against the uninsured. Simply stated, if you are injured in a collision because of the negligence of another driver who does not have insurance, any claims you may have had against the negligent driver can be made against your insurance company.
However, your company is required only to pay compensation up to the amount of the policy limits. The term "policy limits" refers to the amount of monetary coverage you have with uninsured motorist coverage. Your uninsured motorist coverage amount is the same amount as the coverage amount for liability. Your "liability" coverage is the amount of coverage you have if you cause an accident or collision. It is possible that you may suffer harm requiring extensive medical care, and that your uninsured motorist coverage will be insufficient to properly compensate you for your injuries. Please read this related article to learn more how you can avoid this from happening.
If you are not able to resolve your uninsured motorist claim with your insurance company, you have the option of seeking an arbitration, or filing a case in court. An arbitration is a "private trial." Typically, a panel of three arbitrators will decide the issues in your case. You also have the option to seek a jury trial, and the insurance company would be the named defendant. Our office has handled both arbitrations and jury trials involving uninsured motorist claims. Whether to pursue one avenue or another depends on the circumstances of each case.
Underinsured Motorist Claims
An underinsured motorist claim occurs where the person who caused your injury had some auto insurance, but not enough to properly compensate you for your injuries, including your lost wages and/or your medical expenses. In order for you to have an underinsured motorist claim, your uninsured motorist coverage must exceed the liability coverage of the responsible driver.
An underinsured motorist claim usually arises where the liability insurance carrier for the other driver makes a "policy limits" settlement. This is a settlement for the full amount of the liability coverage in order to resolve the claim. Because the settlement requires a complete release of the negligent driver from all future claims, your insurance company will want to review the matter and decide whether to approve the underlying policy limits settlement with the negligent party's insurance company.
Your insurance carrier will then evaluate the claim, and decide whether not to offer additional compensation. Generally, your insurance company will evaluate the "settlement value" of the claim. It will form its own opinion on the amount of compensation that a jury or arbitration panel may set for your case, understanding that it is entitled to an offset of the underlying liability policy limits settlement. For example, if you resolved your liability claim against the negligent driver's insurance company for $25,000, and you carry $50,000 in underinsured motorist coverage, then your insurance company is entitled to a $25,000 offset from any jury verdict or arbitration award. The most that you can recover against your insurance company as an additional $25,000.
There is also the issue of PIP, or personal injury protection benefits. In many cases, your insurance company also gets "credit" from any arbitration award or trial verdict for any PIP benefits already paid.
To learn more about your potential uninsured or underinsured motorist claim in Oregon, call us at 503-325-8600. We have helped many Oregonians with their claims over the past twenty years, and we may be able to help you too.