Oregon Personal Auto Policy Requirements

The Personal Auto Policy you studied earlier is a national form. Before it can be used in Oregon, it has to meet Oregon’s requirements for a motor vehicle liability policy, and an insurer usually conforms it with an Oregon amendatory endorsement. This chapter covers the Oregon rules that endorsement carries for the policy’s liability coverage, and Oregon’s rules for coverage on rented vehicles. Personal injury protection and uninsured motorist coverage, which Oregon also requires, are covered in the chapters Oregon Financial Responsibility and Personal Injury Protection, and Oregon Uninsured Motorist Coverage and Auto Claim Laws.

Amendment of policy provisions — Oregon

You may see the Oregon amendatory endorsement to the personal auto policy called Amendment of policy provisions — Oregon; ISO’s version is PP 01 94. Its exact wording belongs to the insurer or form writer, but what it must accomplish is set by Oregon statute and the Division of Financial Regulation’s filing standards.

What every Oregon auto liability policy must contain (ORS 742.450, 806.080)

An Oregon motor vehicle liability policy must:

• State the name and address of the named insured, the coverage, the premium, the policy period and the limits of liability (ORS 742.450(1))
• Contain an agreement or endorsement stating that the insurance provides the coverage Oregon’s financial responsibility law requires, and is subject to the financial responsibility provisions of the Oregon Vehicle Code (ORS 742.450(2), (3))
• Provide liability coverage of at least 25/50/20: $25,000 for bodily injury to or death of one person, $50,000 for two or more persons in one accident, and $20,000 for damage to the property of others (ORS 742.450(4); ORS 806.070)
• Describe the motor vehicles it covers (ORS 806.080)
• Insure the named insured and every person who uses a covered vehicle with the named insured’s consent, except a driver specifically excluded by name (ORS 806.080)

The required coverage can be met by the policies of more than one insurer that together meet it (ORS 806.080(2)).

Family members (ORS 742.450(8))

The policy must give each family member of the insured who lives in the same household liability coverage equal to the amount the insured purchased. Unless a family member is excluded by name (below), an insurer may not give resident family members lower liability limits than the insured bought.

Temporary replacement vehicles (ORS 742.450(5))

The policy must provide liability coverage for the named insured while driving a temporary replacement vehicle provided by a business that repairs or services motor vehicles, while the named insured’s own vehicle is being repaired or serviced. The coverage is up to the limits that apply to a vehicle the named insured owns, and applies whether or not the named insured is charged for the use of the replacement vehicle.

Excluding a named driver (ORS 742.450(6), (7); OAR 836-058-0010)

An insurer may exclude a specific person by name from the required liability coverage, but only:

• A person other than the named insured
• Because of the person’s driving record, or for a reason the Director sets by rule

The Director’s rule allows an exclusion when the person is rated higher than the named insured and including the person would cause the named insured financial hardship. Financial hardship is caused only if including the person raises the annualized premium for the policy’s liability coverage by more than $1,000 (premium for rating a high-performance vehicle or sports car does not count). The rule also allows an exclusion when the person’s Oregon driver’s license is suspended under ORS 809.409(5) or 809.419(3).

To exclude a driver, the insurer must obtain a statement or endorsement signed by each named insured agreeing that the policy will provide none of the required liability coverage when the excluded person drives. The exclusion does not remove the policy’s uninsured/underinsured motorist or personal injury protection coverage; for an excluded driver, the insurer may limit those to the minimum required limits. Physical damage coverage may be excluded (ORS 742.450(6); DFR filing standards 440-3615).

Liabilities the policy need not cover (ORS 742.454)

The required liability policy need not insure:

• Any liability under a workers’ compensation law
• Bodily injury to or death of the insured’s employee while engaged in the insured’s employment (other than domestic employment), or while engaged in operating, maintaining or repairing a vehicle
• Damage to property owned by, rented to, in the charge of or transported by the insured

These are permissions. The insurer may exclude them; Oregon does not require it to.

When the insurer’s liability is fixed (ORS 742.456, 742.458)

For a policy required by Oregon’s financial or future responsibility law:

• The insurer’s liability becomes absolute as soon as covered injury or damage occurs
• After the injury or damage occurs, the insurer and the insured cannot cancel or annul the policy’s coverage for it by agreement
• No statement by or for the insured that violates the policy can void the policy

For every motor vehicle liability policy:

• The policy, the written application (if any) and any rider or endorsement that does not conflict with the law are the entire contract
• The insured does not have to pay a judgment first before the insurer’s duty to pay arises
• A binder issued until the policy is issued satisfies the policy requirement

Reimbursement, proration, settlement and excess coverage (ORS 742.460 to 742.468)

• Reimbursement and proration: a policy may require the insured to reimburse the insurer for a payment it made only because the statutes required it, and may prorate its coverage with other valid and collectible insurance (ORS 742.460)
• Settlement: the insurer has the right to settle any covered claim, and a settlement made in good faith reduces the limits of liability by its amount (ORS 742.462)
• Excess coverage: a policy may provide lawful coverage above or in addition to the required coverage. The extra coverage is not subject to ORS 742.031 or 742.450 to 742.464, and only the required part is subject to the financial responsibility requirements (ORS 742.464)
• Other liability policies: a comprehensive general liability, excess liability or umbrella liability policy is not a motor vehicle liability policy for purposes of the laws mandating the kinds or amounts of auto coverage (ORS 742.468)

Appraisal of physical damage (ORS 742.466)

If a policy lets the insured get an independent appraisal of physical damage to the vehicle, the appraisal must be done by a person holding a vehicle appraiser certificate. When the policy resolves a dispute through appraisal and the final appraisal is greater than the insurer’s last offer made before the appraisal costs were incurred, the insurer must reimburse the insured’s reasonable appraisal costs. If the policy has no appraisal provision, a dispute is resolved under the Director’s rules.

An Oregon auto policy’s appraisal clause may be used only if both the insurer and the insured agree to it when the dispute arises. The Division of Financial Regulation will not approve a form that lets either side force an appraisal (Bulletin DFR 2026-7).

Newly acquired vehicles

An Oregon auto policy must give the insured at least 14 days to report a newly acquired vehicle for liability, personal injury protection and UM/UIM coverage, and at least 4 days for physical damage coverage (DFR filing standards 440-3615, under ORS 742.005).

Bankruptcy of the insured (ORS 742.031)

A liability policy covering injury to persons or damage caused by a vehicle must provide that the bankruptcy or insolvency of the insured does not relieve the insurer of its obligations. If a person wins a final judgment against the insured and it goes unpaid, either because collection fails or because it is not satisfied within 30 days after it is rendered, that person may proceed directly against the insurer for the judgment, up to the policy’s limit.

Proof of insurance and risk classification (ORS 742.447, 742.449)

With a policy designed to meet Oregon’s financial or future responsibility requirements, the insurer must issue proof of insurance showing the effective and expiration dates. It may be a card or, if the insured agrees, electronic (ORS 742.447).

An insurer may not place a person in a higher risk category solely because the person (ORS 742.449):

• Let a prior auto liability policy lapse, unless the person drove uninsured after it lapsed
• Had driving privileges suspended for a nondriving offense under the provisions the statute lists

Domestic partners (ORS 106.340)

Oregon grants a partner in an Oregon registered domestic partnership any privilege, immunity, right or benefit, and imposes any responsibility, that the law grants or imposes because a person is married, on equivalent terms, with exceptions for certain retirement and employee benefit plans (ORS 106.340). A domestic partnership is a civil contract between two people at least 18 years old, at least one of whom is an Oregon resident (ORS 106.310). The Division of Financial Regulation requires an Oregon auto policy to recognize a domestic partner wherever it recognizes a spouse, for example in “you” and “family member”.

Sidenote

Know this...

Unless excluded by name, resident family members get the same liability limits the insured bought, and the policy must provide liability coverage for the named insured in a repair shop’s temporary replacement vehicle. A driver may be excluded only by name, never the named insured, and only with a statement signed by every named insured.

Rental vehicles in Oregon

No Oregon statute requires a personal auto policy to extend liability or physical damage coverage to a car rented from a rental company. (The required PIP benefits do apply to an insured injured in a rented car, ORS 742.520.) Whether the insured’s own policy covers a rental car depends on the policy and any endorsement the insured buys, such as the rental vehicle coverage described in the chapter Personal Auto Insurance (PAP). Oregon’s statutes on rental cars regulate the rental company.

Collision damage waivers (ORS 646A.140, 646A.142). A collision damage waiver is an agreement in which the rental company gives up its right to charge the renter if the car comes back damaged. A rental company that offers one must post a sign approved by the Department of Consumer and Business Services saying the waiver is optional and costs extra. Before selling or offering one, it must give the renter a written notice, at the top of the rental agreement or attached to it, in at least 10-point type, that the waiver is not mandatory and that the renter may wish to check whether the renter’s own vehicle insurance already covers damage to the rental vehicle, and what its deductible is.

Insurance sold by rental companies (ORS 744.850 to 744.858). A rental company may hold a limited license to sell insurance in connection with rentals of 90 consecutive days or less: personal accident, liability (including uninsured and underinsured motorist coverage as state law requires), personal effects, and roadside assistance and emergency sickness coverage. It may sell only if written material, approved by the Director and available at every rental location, discloses that the coverage might duplicate coverage the renter’s own auto or liability policy already provides, and that buying it is not required to rent a vehicle, and the rental agreement shows its price separately.

Lesson summary

• An Oregon auto liability policy must state the named insured, coverage, premium, policy period and limits; carry the financial responsibility agreement; and provide at least 25/50/20 (ORS 742.450, 806.070).
• It must cover permissive users, give resident family members the same limits the insured bought unless they are excluded by name, and provide liability coverage for the named insured in a repair shop’s temporary replacement vehicle.
• A driver other than the named insured may be excluded by name for driving record or a reason in the Director’s rules (such as financial hardship: excluding a higher-rated driver saves more than $1,000 a year in liability premium), with a statement signed by every named insured. The exclusion removes only the liability coverage: the driver keeps UM/UIM and PIP, which may be limited to the minimum limits.
• The policy need not cover workers’ compensation, injuries to the insured’s employees on the job (other than domestic employees) or while working on a vehicle, or property owned by, rented to, in the charge of or transported by the insured (ORS 742.454).
• For a financial responsibility policy, the insurer’s liability becomes absolute when the injury occurs, and no later agreement or violating statement can void it (ORS 742.456). A good-faith settlement reduces the limits.
• The insured’s bankruptcy does not relieve the insurer; an unpaid judgment (not satisfied within 30 days after it is rendered) can be pursued directly against the insurer (ORS 742.031).
• An insurer that offers appraisal must reimburse appraisal costs when the final appraisal exceeds its last offer (ORS 742.466), and an appraisal goes forward only if both sides agree (Bulletin DFR 2026-7).
• A newly acquired vehicle must be reportable for at least 14 days for liability, PIP and UM/UIM, and 4 days for physical damage.
• A lapse (if the driver did not drive uninsured afterward), or certain suspensions for a nondriving offense, cannot by itself move a driver to a higher risk category (ORS 742.449).
• Oregon does not require a personal auto policy to extend liability or physical damage coverage to rental cars. A rental company selling a collision damage waiver must tell the renter it is optional and that the renter’s own insurance may already cover the car.