This article discusses the different types of car insurance coverage and how much of each type of coverage you should have. Every driver in Oregon is required to have car insurance and driving without insurance can get you a ticket and the fine of up to $427. ORS 806.010(1). If you are injured in a motor vehicle accident while driving without insurance you might not be able to recover damages for your pain-and-suffering. ORS 31.715.
There are several different types of motor vehicle insurance coverage including:
What is it? Liability coverage pays the damages of others when you are at fault for causing a motor vehicle accident. Liability coverage pays economic damages such as medical expenses, lost income, and property damage as well as noneconomic damages for pain-and-suffering and emotional distress for people you injure in an accident.
Minimum Liability Coverage for Personal Injury $25,000 per person/$50,000 per MVA.
Oregon law requires a minimum of $25,000 of liability coverage for injuries or death to any one person and a minimum of $50,000 of liability coverage for everyone injured or killed in any one accident. ORS 806.070(2)(a). This is what is referred to as a “split limit” coverage because there is one per person limit and a another per accident limit. You must have a minimum of $25,000 of coverage for any one person injured or killed and $50,000 for each accident. In other words, you have to have $25,000 of coverage to cover each person you injure and $50,000 of coverage to cover all the people regardless how many you injure in an accident.
How much Liability Coverage should you have? Most experts recommend liability insurance coverage for personal injuries of at least $100,000 per person and $300,000 per MVA.
Minimum Liability Coverage for Property Damage $20,000 per MVA.
Property damage includes damage to vehicles, personal property in vehicles, and damage to buildings and other property caused by car accidents. ORS 806.070(2)(c).
Personal Injury Protection Coverage
Personal Injury Protection coverage also known as PIP is like health insurance for your car. Every auto insurance policy in Oregon must have PIP coverage with limited exceptions. ORS 742.520(1).
PIP Benefits include Medical Expenses, Lost Income, Funeral Benefits, Babysitting and Help Around the House. ORS 742.524(1).
Who is Entitled to PIP Benefits?
You and passengers in your car who are injured as a result of the “use, occupancy or maintenance” of your car are entitled to PIP benefits under your auto insurance policy. ORS 742.520(2)(b). It doesn’t matter who was at fault for the accident. It doesn’t even matter if anyone was at fault.
You, others insured under your auto insurance policy, and members of your household who are injured from the “use, occupancy or maintenance” of any car are also entitled to PIP benefits under your auto insurance policy. ORS 742.520(2)(a).
You May the Entitled to Stack PIP Benefits from Multiple Policies!
The PIP insurance for the owner of the car in which the injured people were riding pays first. ORS 742.526(1)(a) & (b). If you are injured while a passenger in someone else’s car, you can recover more PIP benefits from your auto insurance policy if the PIP benefits provided by the car owner’s policy run out. ORS 742.526(1)(d). In other words, you can stack your PIP benefits onto the car owners PIP benefits to double the amount of coverage available.
Minimum PIP Coverage
Medical Expenses $15,000. Lost Income $3000 per month for 1 year. Funeral Benefits $5000. Babysitting $750. Help around the house $30 per day. ORS 742.524(1).
How much PIP Coverage should you have? I recommend having $100,000 of PIP medical benefits as increasing your PIP limits doesn’t increase your insurance premium much and you don’t have to pay for your medical treatment if your health insurer pays or refuses to pay.
For more information about PIP benefits read the following article on my webpage: What is Personal Injury Protection Insurance?
Uninsured Motorist Coverage (“UIM”)
What is UIM? UIM is coverage that insures you for the damages you are entitled to recover when you are injured or killed in a motor vehicle accident caused by a driver with no insurance or not enough insurance to pay your damages. ORS 742.500(5).
Minimum UIM Coverage Same as Liability Coverage.
Oregon law requires motor vehicle insurance policies to have the same amount of UIM as they do for liability coverage unless the insured elects lower limits in writing. ORS 742.502(2)(a).
Minimum UIM Personal Injury Coverage: $25,000 per person and $50,000 per MVA. ORS 742.502(2)(a).
How much UIM Coverage should you have? You should have the same amount of UIM coverage as you do liability coverage. As noted above, most experts recommend liability insurance coverage of at least $100,000 per person and $300,000 per MVA.
UIM Property Damage Coverage Not Required. Insurance companies are required to make uninsured property damage coverage available if you want it but you are not required to buy it. ORS 742.510(1). If buy it, you must purchase at least $20,000 of coverage per accident. ORS 742.510(1).
What is it? Collision coverage, also known as full coverage, pays for property damage to your car when you are in an accident with another car or object regardless who is at fault.
How much will it pay? Collision coverage will pay the lesser of the cost to repair or the fair market value of your vehicle on the date of the incident if it is totaled less the deductible.
What is a Deductible? A deductible is an amount that the insurance company deducts from the amount it is required to pay under the policy. For example, the insurer would only be required to pay $2500 if your vehicle sustained $3000 in damage and you had a $500 deductible. The higher deductible, the lower insurance premium.
Do you need collision coverage? If you have an expensive car, you probably want to have collision coverage because without it your insurance company will not pay to repair your car when you are in an accident that is your fault or that is not someone else’s fault.
How much should you have? With collision coverage, the question is how high of a deductible should you have. The higher deductible, the lower insurance premium. However, the higher deductible, the less the insurance company pays if you make a claim. You should have a deductible of $500-$1000.
What is it? Comprehensive coverage, also known as full coverage, pays for property damage to your car caused by something other than a MVA. Comprehensive coverage would pay if your car was stolen or vandalized or damaged by a flood, fire or other type of incident.
How much will it pay? Comprehensive coverage will pay the lesser of the cost to repair or the fair market value of your vehicle on the date of the incident less the deductible.
What is a Deductible? A deductible is an amount that the insurance company deducts from the amount it is required to pay under the policy. The higher deductible, the lower insurance premium. For example, the insurer would only be required to pay $5000 if your vehicle sustained $10000 in damage but was only worth $6000 on the date of the incident and you had a $1000 deductible.
Do you need comprehensive coverage? If you have an expensive car, you probably want to have comprehensive coverage because without it your insurance company will not pay to repair your car when it is damaged by something other than an accident
How much should you have? With comprehensive coverage, the question is how high of a deductible should you have. The higher deductible, the lower insurance premium. However, the higher deductible, the less the insurance company pays if you make a claim. You should probably have a deductible of $500-$1000.
Rental Car Coverage
Rental car coverage is coverage that pays for a rental car while your vehicle is being repaired after a MVA or other incident covered by your policy.
Gap insurance pays the difference between the fair market value of your car and the balance owing on the loan used to purchase or finance the car.
Do you need gap insurance? If you borrowed money to buy your car, you should buy gap insurance because if your car is totaled in a MVA, your insurance company will only pay the fair market value of your vehicle and that will probably be less than the amount you owe on your loan.
Umbrella insurance is extra liability insurance above the limits of your homeowner’s, auto, and other types of insurance. For example, if you have auto insurance with liability limits of $100,000 per person and $300,000 per MVA, your umbrella insurance will pay if you injure someone in a MVA that is your fault and their damages are more than $100,000.
Do you need umbrella insurance? If you have assets such as real property with lots of equity, you should probably have an umbrella insurance policy. This is because 13% of personal injury liability awards and settlements are for $1 million or more. If you don’t have assets, you may not need umbrella insurance but you may have to file bankruptcy if you severely injure someone in a MVA and they obtain a large judgment against you.
How much umbrella insurance should you have? I recommend $1 million of umbrella coverage.
Gary R. Johnson is a Central Oregon personal injury attorney who has been practicing for 24 years.