UM/UIM Coverage: Protecting Yourself Before and After an Accident
Car accidents can be life-changing, not just physically and emotionally but financially. One of the more frustrating situations we encounter is when a car crash or drunk driving accident victim in Oregon is unable to receive full compensation for their injuries due to the at-fault driver’s inadequate insurance coverage—or, worse, lack of coverage altogether.
Understanding the Risk: Judgment-Proof Drivers
In personal injury law, “judgment proof” generally refers to individuals who are unable to pay because of a lack of assets or income. While you may win the lawsuit and secure a judgment, a judgment-proof individual lacks the resources to pay that judgment. Many can also file for bankruptcy to avoid paying more than their insurance policy covers.
Most personal injury and wrongful death judgments are dischargeable in bankruptcy under 11 U.S.C. § 727(b), which releases the debtor from liability for most debts after bankruptcy proceedings. However, there are key exceptions, such as:
Judgments arising from drunk driving are nondischargeable under 11 U.S.C. § 523(a)(9). For more information, visit our practice area page on Drunk Driving Accidents.
Judgments based on willful or malicious conduct are also nondischargeable under 11 U.S.C. § 523(a)(6).
This legal reality means that if the at-fault driver is judgment-proof, your recovery may be limited to the policy limits of their motor vehicle liability insurance. In Oregon, the minimum required liability coverage is $25,000 per person and $50,000 per accident under ORS 806.070(2)(a). While this may seem adequate at first glance, even a brief hospital stay these days can exceed $25,000.
The Solution: Uninsured and Underinsured Motorist Coverage
Thankfully, Oregon law mandates that all motor vehicle insurance policies include coverage for both uninsured motorists (UM) and underinsured motorists (UIM). Under ORS 742.502(1):
“Every motor vehicle liability policy issued for delivery in this state that insures against loss resulting from liability...must provide uninsured motorist coverage.”
Additionally, ORS 742.502(2)(a) ensures that UM and UIM policy limits match the bodily injury liability limits unless the insured opts for lower limits in writing. When a car accident victim’s damages exceed the at-fault driver’s liability limits, the victim’s UIM coverage kicks in (up to their coverage limits) to make up for any shortfall.
How It Works: A Practical Example
Let’s break it down with a real-world scenario:
A car accident victim is seriously injured in an auto accident in Portland, Oregon, and their medical bills total $50,000. The at-fault driver has the minimum liability coverage of $25,000. The car accident victim has $25,000 in UM/UIM coverage.
In Oregon, the car accident victim’s UM/UIM coverage is stacked on top of the at-fault driver’s liability limits if the car accident victim’s damages exceed the at-fault driver’s liability limits. This means in the example above, the car accident victim could recover:
$25,000 from the at-fault driver’s liability insurance.
AND an additional $25,000 from their UM/UIM coverage to make up for any shortfall.
Stacking UIM coverage on top of the at-fault driver’s liability limits became possible in 2016 when Oregon updated its insurance laws. ORS 742.502. There can be other issues relating to UIM stacking. For example, if your household has multiple motor vehicle insurance policies, do the UIM limits of those policies stack? Potentially, yes, but there are ways insurance companies can get around that result. Unfortunately, resolving complex insurance coverage disputes requires carefully reviewing the entire insurance policy and being thoroughly familiar with Oregon insurance law. That is why it is critical to contact an experienced uninsured/underinsured motorist claims lawyer in Portland, like myself, who can analyze the situation thoroughly to determine your rights.
Why UM/UIM Coverage Matters
The aftermath of a car accident is stressful enough without worrying about who will pay for medical bills, lost wages, and other damages. Of course, purchasing higher policy limits costs more money, and in these difficult economic times, we can only do what we can. But doubling or tripling your policy limits may not be as expensive as you think. Check with your insurance company and see what you can afford. That way, if the unthinkable happens, at least you’ll be prepared.
Contact an Experienced UM/UIM Claims Lawyer Today
The Law Office of Benjamin B. Grandy PC has extensive experience handling uninsured and underinsured motorist claims and insurance coverage disputes. If you have questions about your insurance policy, your rights under that policy, or the claims process, we’re here to help. Don’t let the insurance companies take advantage of you. Contact our Portland personal injury law firm today for a free consultation and to protect your rights.
Last Updated: 11-21-2024
