Oregon may be the only state in the country where you cannot hold your own auto insurance company accountable for unfairly evaluating the value of your claim. What does that mean? We all know bad driving happens. A careless driver may crash into your vehicle and cause serious injury to you or your loved one. Serious car accidents can result in enormous medical bills and loss of the ability to earn a living for a period of time. The financial burden can reach into the hundreds of thousands or even millions of dollars.
Underinsured Motorist (UIM) Coverage
When the careless driver that caused the injuries has only the minimum coverage under the law ($25,000), the other driver’s insurance does not even begin to meet the losses he caused. Because of this risk, many of us carry additional underinsured motorist (“UIM”) coverage with our own insurance companies. This typically ranges from $50,000 to $1,000,000. Under these policies, your insurance company is supposed to pay you for the total amount of the harm you suffered regardless of the amount of insurance the bad driver carries, up to your own UIM limits.
Many people trust their own insurance companies and believe that payment is based on a fair investigation of their injuries and losses. However, we are increasingly seeing insurance companies refuse to fairly assess the losses that their customers suffer from underinsured drivers. Instead, customers who have faithfully paid their premiums for years are offered only a fraction of what is due to them in light of the severity of their injuries and losses. Because they trust their insurance company, some injured persons will take those low-ball offers. As a result, the insurance company avoids paying the full amount that it is obligated to pay. In other situations, the injured parties recognize the evaluation as unfair and contact an attorney to bring a case against the insurance company so that a neutral third party, such as an arbitrator, will be used to make a fair evaluation.
Standing Up Against Big Insurance Companies
Recently, we took such a case to arbitration. A careless driver had hit our client, a doctor, at a stop light, causing our client to need neck surgery. She suffered permanent injury as a result of the accident that caused her to lose part of her past and future income. The Farmers insurance company offered only $50,000 of additional money on her underinsured motorist policy. The bad driver’s insurer settled for $100,000. The facts were simple and the insurance company had very weak evidence to support their argument. We obtained overwhelming evidence that the doctor indeed suffered serious medical, physical, and financial losses. The arbitrator fairly evaluated the claim at $380,000.
We are familiar with other cases in Oregon in which Farmers insurance and other insurance companies refused to fairly assess their insured’s underinsured motorist claims. In these cases, the only way for the injured person to fairly recover is to bring the case to trial or arbitration.
In other states, insurance companies would be subject to a bad faith claim if they ever chose to unfairly evaluate their customer’s claims. Those bad faith claims could result in punitive damages. Exposure to punitive damages is a deterrent against such conduct by insurance companies in those states. But in Oregon, there is no punishment for an insurance company that acts this way.
Oregon Law Helps in Smaller Cases
ORS 20.080 is intended to help someone who has suffered more modest injury or property losses by encouraging wrongdoers and their insurers to fairly and quickly settle their claims, or suffer attorney fee consequences. The 2011 Legislature raised the amount subject to ORS 20.080 to $10,000. Under that statute:
- The injured person (or their attorney) writes a demand, with supporting documentation, for an amount of $10,000 or less to the responsible party, and if known, their insurer;
- The responsible party has 30 days to tender an amount;
- If the responsible party tenders less than the damages later awarded to the plaintiff, the defendant is liable for the plaintiff’s reasonable attorney fees.
ORS 20.080 has two benefits to the injured person. First, because the responsible party may have to pay the attorney fees in February 2012
Insurance Company’s Unfair Offer Rejected by Arbitrator
Our client was injured in a crash that resulted in neck surgery and permanent injuries affecting her past and future income as a doctor. The bad driver’s insurer settled for $100,000. The Farmers Insurance company had offered our client only $50,000 in additional money on her underinsured motorist policy. The facts were simple and the insurance company had very weak evidence to counter the overwhelming evidence that our client indeed suffered serious medical, physical, and financial losses. The arbitrator fairly evaluated the claim at $380,000.