The ABC’s of Automobile Insurance Coverage – Part 2 – UM and UIM Claims

"Car crash" by La Cara Salma - Own work Nel vero senso della parola! (sic!). Licensed under CC BY-SA 3.0 via Wikimedia Commons - https://commons.wikimedia.org/wiki/File:Car_crash.jpg#/media/File:Car_crash.jpgIn a previous personal injury article, we discussed how Personal Injury Protection (PIP) insurance works in Oregon.  We reviewed this system of no-fault automobile insurance coverage developed by the Oregon state legislature to get people quick medical benefits to pay for their auto-related injuries. This week we will be discussing another aspect of personal injury protection related to automobile accidents:  uninsured and underinsured motorist coverage

What are Uninsured (UM) and Underinsured (UIM) Motorist Insurance?

In the typical car accident case you get into a collision with another driver, you exchange insurance information, and you make an insurance claim with either your own insurance company or the other driver’s.  However, in some two-automobile accidents the only insurance available to pay for your damages is your own.  This could be because:

  • the other driver involved in the accident did not have insurance at the time of the accident,
  • the other driver fled the scene of the accident without giving you his or her insurance information,
  • the other driver’s insurance company becomes insolvent.

These are all situations where your own insurance company would pay you benefits under an uninsured motorist (UM) claim.  UM claims are claims pursued against your own insurance company when there is no other insurance policy to draw upon.  An underinsured motorist (UIM) claim is a bit different.  This claim arises when another driver who is at fault hits you and has insurance but the amount of their insurance coverage is not enough to pay for your damages.  In this situation your own insurance may pay for the excess coverage that you require to pay your bills.

Why is it important to have UM and UIM coverage?

Without this type of insurance coverage you can end up paying the medical bills and property damage that were a result of another person’s bad driving.  There are irresponsible people out there who will drive without a valid license or insurance.  They may be driving without insurance because they cannot afford it, forget to pay it, cannot get it (if their license is suspended), or simply choose, against the law, not to purchase it.  There are also individuals who would rather flee the scene of an accident in order to avoid civil or criminal liability than face the consequences of their actions.  Suffering an injury from a negligent driver is bad enough, but having to pay for the treatment yourself is even worse.  It is important to have an experienced attorney represent you on uninsured or underinsured motorist claims because these types of claims are particularly complex and they are the types of claims that the insurance companies love to deny.

What laws regulate UM and UIM insurance in Oregon?

Thankfully, the Oregon legislature understands the importance of this type of insurance and mandates that every auto insurance policy in Oregon include uninsured or underinsured motorist coverage.  This is designed to protect Oregonians from going bankrupt paying the often extremely high medical bills that can result from a severe auto accident.  ORS 742.504 mandates that all Oregon drivers have uninsured and underinsured motorists protection.  Auto policies must provide a $25,000 minimum in coverage for UM/UIM claims.

How are UIM claims different from ordinary auto accident claims?

It is very important to know that in Oregon you must get permission from your own insurance company to settle a UIM claim with an underinsured driver’s insurance company.  If you take a settlement from the other driver’s insurer without first getting permission from your own then you cannot collect money under your own insurance’s UIM policy, thus limiting the total amount of money that you can recover.  If you do get permission from your own insurance company then you may be able to collect from the at-fault driver’s policy and your own, thus maximizing the amount available to cover your costs.

For informational purposes only and not to be relied upon as legal advice.

by David M. Mitchell, John A. Pinzelik, and Brook D. Wood

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