Oregon’s Financial Responsibility Law requires that all automobile insurance policies have certain provisions. They fall into three parts: (1) liability, (2) uninsured/ underinsured motorist, and (3) personal injury protection.
Liability policies pay for the consequences of the insured’s negligence. Basic driving errors like failures of lookout, speed, and control, and failure to obey traffic control devices are common examples. Certain other people are covered as well, like permissive users of the insured vehicle, and the Family Purpose Doctrine may also extend coverage to the insured’s family members. The liability policy will pay up to the limits of liability for bodily injury and/ or property damage unless the insurer’s conduct meets the Oregon standards for bad faith insurer conduct.
Uninsured (UM) and Underinsured (UIM) coverages are also required. They cover you for the consequences of an uninsured or underinsured motorist’s negligence. This includes a hit-and-run accident and includes most “phantom vehicle” accidents where there is no contact between the two vehicles. UM/UIM is a first party claim, which means you make the claim against your own insurance company, rather than a liability claim, which is a third party claim, where you make the claim against another driver’s policy. Whether a driver is underinsured with respect to you may be in a state of flux after a recent Oregon Court of Appeals case which says that you look to your damages to determine if the other driver is underinsured, rather than to your policy limits.
Both liability and UM/UIM coverages will pay for economic damages like medical expenses, earnings and wage losses, and property damage, and both will pay for non-economic damages like pain and suffering and impairment and inconvenience to your normal and usual activities. Both also require a showing of fault on the part of a driver.
Personal Injury Protection (PIP), however, is a no-fault policy and covers you for your medical expenses, portions of your wage losses, and several other smaller benefits. The only requirement is that you were in an accident and the losses are covered. You do not need to show that anybody was at fault. PIP is also a first party coverage, which means you will make the claim against your own insurer, and they usually get repaid by the liability insurer at the end of the case if the other driver is at fault for the accident.