Insurance Legislation Updates

No more "family exclusion" clauses in auto insurance policies

Under prior law, an insurer could sometimes exclude liability coverage for bodily injuries or property damage suffered by family members. Previously, if family members were riding together and the driver made an error resulting in serious injury to one or more of the family passengers, the insurance company would claim that there was no available liability insurance.

This legislation is part of a number of new Oregon laws which expand automobile insurance coverage for consumers, and clarify ambiguities in the insurance laws.

This insurance loophole was solely because the injured persons were related to the at-fault driver. Oregon courts reformed such contracts and interpreted the policies as providing the statutorily required minimum limits of $25,000 in insurance coverage per person ($50,000 per collision). Under prior law, if a family member had horrendous injuries and losses that would be fairly valued, for example, at a million dollars, because of the family exclusion clause they could recover no more than $25,000. Under House Bill 3086, insurance companies may no longer exclude liability coverage for family members for policies issued or renewed after May 2007. Family members should now have access to the same amount of liability coverage as strangers do.

( www.leg.state.or.us/07reg/measpdf/hb3000.dir/hb3086.en.pdf )

Underinsured motorist (UIM) insurance applies when hit by government vehicles

Ordinarily, a person can get financial protection from being severely injured by an underinsured driver by purchasing a policy with significant underinsured motorist limits. However, under the Oregon Tort Claims Act (OTCA), there is an arbitrary low limit to the amount an injured person can recover against public entities, regardless of the severity of the losses. Unfortunately, Oregon courts held that a person could not recover under their own policy's UIM coverage any amount above the OTCA limits, because the OTCA set the maximum amount that the person was entitled to recover. So if a person had $300,000 in damages and a $300,000 underinsured motorist policy, when they were hit by a government vehicle, they could usually recover only $100,000 from the government agency, and nothing under their own UIM coverage that they had paid for. Under HB 2908 , a person is now entitled to recover the same amount of damages under their underinsured motorist insurance coverage, regardless of whether the injury was caused by a government employee or a private citizen.

( www.leg.state.or.us/07reg/measpdf/hb2900.dir/hb2908.en.pdf )

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Insurance Legislation Updates No more "family exclusion" clauses in auto insurance policies

Underinsured motorist (UIM) insurance applies when hit by government vehicles

Tort Tip Archives

Insurance Legislation Updates

No more "family exclusion" clauses in auto insurance policies