Wednesday, June 11, 2008

Do you need more insurance?

Sad but true. Over the last year, we have handled four significant uninsured motorist cases where our client's insurance policy was simply too small. The first of these cases prompted me to greatly increase my own insurance policy, not only for my sake, but for the sake of my wife and infant daughter as well.

A year ago, I litigated a case where a client was hit from behind by an uninsured motorist while riding a bike. I obtained an award of over $500,000. Unfortunately, our client only had a $300,000 insurance policy. Because this was an uninsured motorist case (where the most money you can get is the limit of your own insurance policy), our client was unable to recover $200,000 of his award.

Ten months ago, I litigated another case where our client was hit from behind by an uninsured motorist while on a bicycle. He was awarded over $250,000 in damages, but because he only had a $100,000 policy, he was unable to recover the difference.

A couple of months ago, Arne Cherkoss obtained an arbitration award of $300,000 in an uninsured motorist case. Our client only had a $100,000 policy, and could not recover the difference. Then, just last week, Arne achieved another $300,000 award in another uninsured motorist case where our client had only a $100,000 policy. Again, our client could not recover the difference.

In these four examples alone, four of our clients were unable to recover roughly $750,000 of the arbitration awards. Each individual was severely hurt, and has suffered permanent, life changing injuries.

Unfortunately, you cannot control how much insurance coverage other drivers on the road have. You wouldn't believe how many cases we have where the driver who caused the accident didn't have any insurance at all, even though Oregon law requires it! However, what you can control is the amount of uninsured/underinsured motorist coverage you have, so there is at least some guarantee as to how much insurance might be available.

There is one thing to keep in mind, however. In Oregon, unlike in Washington, uninsured / underinsured motorist coverage does not "stack" on the bad driver's policy. For example, in Washington, if the bad driver has $25,000 in coverage, and you have $100,000, you can add the two policies together, giving you a total of $125,000 in coverage. If the other driver had $100,000 in coverage, you would add that to your policy, giving a total of $200,000 of available coverage.

In Oregon, on the other hand, your insurance policy would only cover the difference between the two limits. Thus, in Oregon, if the bad driver had $25,000 in coverage, you could only collect an additional $75,000 from your own, as your insurance would get credit for the $25,000 you had already collected. If the bad driver had $100,000 in coverage, you couldn't collect a dime from your own insurance policy. Thus, in Oregon, when you buy a $100,000 underinsured motorist policy, you are only buying a guarantee that there will be $100,000 available from which to collect; however, you are not buying an additional $100,000 in coverage!

Just food for thought.

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