It is fair to say that most people have little understanding about how their Underinsured Motorist (UIM) coverage works in practical application. UIM coverage is required under Oregon law as a protection against damages cause by an underinsured motorist. In a way, it is the part of your insurance policy that you buy to protect yourself from those with inadequate insurance coverage.
However, until July of 2009 even Oregon personal injury attorneys were in the dark about how much the UIM policy had to pay in certain cases.
Typically, a person will have a minimum of $25,000.00 in UIM coverage as a part of a basic insurance policy, although smart drivers purchase more. If a person gets in an accident with a driver with a $25,000.00 minimum liability policy and sustains over $25,000.00 in damages, he can pursue a UIM claim under his own policy. Most people seeing the $25,000.00 in coverage would assume that they are entitled to up to an additional $25,000.00 under their own policy.
The Oregon Supreme Court has definitively said that assumption is wrong.
In Vogelin v. American Family Insurance, the high court said that UIM coverage works in a much different and more miserly way. Ms. Vogelin was seriously injured in a car accident, suffering over $300,000.00 in damages. The at fault driver had a minimum liability policy of $25,000.00. Ms. Vogelin had UIM coverage of $100,000.00. The Supreme Court held, in interpreting the statute governing UIM benefits, that Ms. Vogelin was entitled to recover only $75,000.00 from her UIM carrier, because the law required her to deduct the amount she had recovered from the at fault party from her policy limits.
Oregon’s statutory scheme governing auto insurance coverage is a byzantine maze of rules and regulations, most written by the insurance industry and slipped into the laws over time. The law as a whole is filled with special considerations for the insurance industry so the result in Vogelin is hardly surprising.
But what of the consumer who finds out his “$100,000.00″ UIM policy is really not worth its face value and may be worth nothing at all?
The lesson is this: know your coverage and think ahead. We handle many tragic cases where we have seriously injured persons who are entitled to substantial compensation, but there is only fraction of the just compensation available under the available insurance policies. UIM insurance is the coverage you buy to help YOU if the unthinkable happens. Insure yourself against other people’s negligence at least as well as you insure other people against your negligence.
As experienced Oregon Personal Injury Lawyers, we recommend to our clients that they carry at least $300,000 of Uninsured and Under-insured Motorist coverage.