Oregon Financial Responsibility and Personal Injury Protection
Oregon writes several of its own requirements into every personal auto policy delivered in the state, and some of them change the standard Personal Auto Policy you studied earlier. This chapter covers the financial responsibility law and personal injury protection (PIP), which Oregon requires on every private passenger auto policy. The next chapter covers uninsured motorist coverage and Oregon’s auto claim rules.
Laws
Oregon Motor Vehicle Financial Responsibility Law
Oregon’s financial responsibility law requires a person who owns or drives a motor vehicle to be able to pay damages for liability arising out of an accident, in at least set minimum amounts. The Department of Transportation, not the Department of Consumer and Business Services, administers it. The rules are in ORS chapter 806.
Required motor vehicle limits of liability (ORS 806.070, 806.075)
The minimum a policy must pay is a schedule of three amounts, for any one accident (ORS 806.070):
| Limit | Minimum |
|---|---|
| Bodily injury to or death of one person | $25,000 |
| Bodily injury to or death of two or more persons (subject to the per-person limit) | $50,000 |
| Injury to or destruction of the property of others | $20,000 |
Written as a split limit, the Oregon minimum is 25/50/20.
A person convicted of driving under the influence of intoxicants must show higher bodily injury limits (ORS 806.075). The person files a certificate of insurance showing bodily injury limits of at least $50,000 for one person and $100,000 for two or more persons in any one accident, and must keep those future responsibility filings in place for three years from the date the first filing is required.
Other ways to prove responsibility (ORS 806.011, 806.060, 806.080)
Methods of compliance (ORS 806.060). A person can meet Oregon’s financial responsibility requirements in only two ways:
- A motor vehicle liability insurance policy that meets ORS 806.080 and provides at least the ORS 806.070 minimums
- Self-insurance under ORS 806.130. A self-insurer must be issued a certificate of self-insurance by the Department of Transportation, must either show it can pay judgments or already be qualified to act as a self-insurer under Oregon law or a city ordinance, must agree to provide the same coverage an insurer would (including uninsured motorist coverage), and must have more than 25 motor vehicles registered in its name. Self-insurance is a practical option for a business fleet, not for an individual driver
What the policy must do (ORS 806.080). A liability policy used to prove financial responsibility must:
- Designate every motor vehicle it covers, by description or by appropriate reference
- Insure the named insured, and every other person who uses a covered vehicle with the named insured’s consent, against liability imposed by law for damages arising out of owning, operating, using or maintaining it. (A driver specifically excluded under ORS 742.450 is the one exception.)
- Provide at least the minimum limits of ORS 806.070
The requirement can be met by the policies of more than one insurer that together meet it.
Carrying proof of insurance (ORS 806.011). Proof of insurance, or other current proof of compliance the Department of Transportation approves by rule, must be carried in each motor vehicle operating in Oregon, unless the vehicle is exempt from the financial responsibility law. The proof may be shown on an electronic device, and showing it that way does not give a police officer consent to look at anything else on the device. A driver who cannot show proof when a police officer asks for it gives the officer reasonable grounds to believe the vehicle is being driven without the required insurance. The registered owner may black out the addresses on the proof, but nothing else.
When a person must file proof of future responsibility, such as after a DUII conviction, the insurer issues a certificate of insurance and must notify the Department of Transportation of any cancellation of the policy within 10 days after the cancellation takes effect (ORS 806.270).
Personal injury protection definitions (ORS 742.518 to 742.544)
Oregon is one of the states that requires personal injury protection (PIP). Every motor vehicle liability policy issued for delivery in Oregon that covers a private passenger motor vehicle must provide PIP benefits (ORS 742.520). PIP pays benefits no matter who caused the accident. The possibility that the injured person can sue someone else does not relieve the insurer of its duty to pay, and the insurer must pay promptly once proof of loss is submitted.
PIP covers:
- The person insured under the policy
- Members of that person’s family who live in the same household
- Children who live in the household and are being reared as the insured’s own, even though they are not related by blood, marriage or adoption
- Passengers occupying the insured vehicle
- Pedestrians struck by the insured vehicle
A few of the definitions in ORS 742.518 matter on the exam:
- Occupying means in, upon, entering into or alighting from a vehicle
- Pedestrian means a person who is not occupying a self-propelled vehicle. A person using a wheelchair or a similar medically necessary low-powered vehicle designed for a person with a physical disability is still a pedestrian
- Private passenger motor vehicle means a four-wheel passenger car or station wagon not used as a public or livery conveyance. It also includes a pickup, panel truck or similar utility vehicle not used for wholesale or retail delivery (other than farming), a self-propelled mobile home and a farm truck
The benefits are set out in ORS 742.524. Each applies to the injury or death of each person.
Medical
All reasonable and necessary expenses for medical, hospital, dental, surgical, ambulance and prosthetic services incurred within two years after the date of the injury, up to $15,000 in the aggregate for each person.
The provider’s charges are presumed reasonable and necessary unless the insurer notifies the provider that it is denying them within 60 days after the insurer receives the provider’s claim. An insurer that denies PIP benefits must, within the same 60 days, give the insured written notice of the denial, the reason for it and how to contest it, and send a copy to the provider (ORS 742.528).
Loss of income
For an injured person who is usually engaged in a remunerative occupation (who works for pay), and whose disability lasts at least 14 days:
- 70 percent of the income lost from work during the disability, until the person can return to their usual occupation
- Up to $3,000 per month
- For no more than 52 weeks in total
“Income” includes salary, wages, tips, commissions, professional fees and profits from an individually owned business or farm.
The 14 days is a threshold, not a waiting period. Once the disability has lasted 14 days, the benefit covers the income lost during the whole period of disability, from its start. The same threshold applies to the essential services benefit below.
Essential services
For an injured person who is not usually engaged in a remunerative occupation, and whose disability lasts at least 14 days, PIP pays what the person reasonably spends to have someone else perform the essential services they would otherwise have done without pay, such as household work. The person hired may not be related to the injured person or live in the same household.
- Up to $30 per day
- For no more than 52 weeks in total
Funeral
All reasonable and necessary funeral expenses incurred within one year after the date of the injury, up to $5,000.
Day care
PIP also pays for child care. If the injured person is a parent of a minor child and is hospitalized for at least 24 hours, PIP pays $25 per day for child care, beginning after the first 24 hours of hospitalization, up to a total of $750. The payments continue for as long as the parent cannot return to work or, for a parent who does not work for pay, cannot perform the essential services they would otherwise have done.
Deductibles, and when PIP is primary
An insurer may offer the named insured and household family members a deductible of up to $250 on the medical, loss of income and essential services benefits (ORS 742.524(2)). An insurer may always provide more favorable benefits than the law requires (ORS 742.532).
Whether PIP pays first depends on who was hurt and where (ORS 742.526):
| Injured person | PIP is |
|---|---|
| The insured, or a household family member, occupying the insured vehicle | Primary |
| A passenger occupying the insured vehicle | Primary |
| The insured, or a household family member, injured as a pedestrian | Primary |
| The insured, or a household family member, occupying a vehicle not insured under the policy | Excess |
| Any other pedestrian struck by the insured vehicle | Excess over the person’s other collateral benefits |
If the policy says so, PIP benefits may be reduced or eliminated when the injured person is entitled to workers’ compensation or similar medical or disability benefits.
Exclusions from coverage
Under ORS 742.530, an insurer may exclude from PIP any injured person who:
- Intentionally causes self-injury
- Is taking part in any prearranged or organized racing or speed contest, or practicing or preparing for one
- Willfully conceals or misrepresents any material fact in connection with a PIP claim
An insurer may also exclude, from the loss of income and essential services benefits only, a person injured as a pedestrian in an accident outside Oregon, other than the insured or a household family member.
ORS 742.520 also sets out which vehicles are outside the insured’s and family’s PIP coverage. For example, it does not cover an injury while occupying a vehicle they own, or that is furnished for their regular use, if it is not described in the policy.
Arbitration
A dispute between the insurer and a person claiming PIP benefits, about the amount of benefits or a denial, is decided by arbitration if both sides agree to it at the time of the dispute (ORS 742.520(6)). The insured’s share of the cost of that arbitration may not exceed $100; the insurer bears the rest, not counting attorney fees or the cost of producing evidence and witnesses (ORS 742.522).
Disputes between insurers, over whether one insurer must reimburse another for PIP benefits it paid and how much, are always decided by arbitration (ORS 742.534).
Lesson summary
- Oregon’s financial responsibility minimums are 25/50/20 (ORS 806.070). After a DUII conviction, the driver needs 50/100 bodily injury limits on a certificate of insurance for three years (ORS 806.075).
- Financial responsibility is proved only by a liability policy or by self-insurance (more than 25 vehicles, with a Department of Transportation certificate). Proof of insurance must be carried in the vehicle (ORS 806.011, 806.060).
- Every Oregon private passenger auto liability policy includes PIP: medical up to $15,000 within two years; loss of income at 70 percent, up to $3,000 a month for 52 weeks; essential services up to $30 a day for 52 weeks; funeral up to $5,000; and child care of $25 a day up to $750 (ORS 742.524).
- PIP loss of income and essential services require a disability lasting at least 14 days. Deductibles of up to $250 may be offered.
- PIP may exclude intentional self-injury, racing and fraud. A dispute between the insurer and the injured person goes to arbitration only if both sides agree, at a cost to the insured of no more than $100.