You were in an auto accident. You have insurance. So you are covered…right? Well, maybe.
Auto insurance policies contain multiple coverages. Each coverage serves a specific purpose. If your accident involves more than two vehicles, high damages or two vehicles insured by the same company, sorting out insurer roles can be tricky. This problem is compounded by claims examiners who do not clarify roles.
To understand motivations of respective insurers, one must know the basic types of auto insurance coverages listed below:
Liability Insurance refers to insurance coverage for the person at fault in the collision. Policies may refer to this coverage as “third party liability” or “bodily injury and property damage liability” coverage. It is ultimately the liability insurer’s responsibility to protect the party at fault by compensating injured parties for their auto accident losses.
The liability insurer is motivated to show that its’ driver was not at fault or that if he or she was, damages to the injured person were small. To reach this goal, liability insurers often attempt to settle liability claims immediately after collision before injuries and damages are fully realized.
Never prematurely negotiate your liability claim. When you give the liability insurer a demand early on, you set a ceiling which may make eventual settlement more difficult.
- Personal Injury Protection
So, if the other guy is at fault, why will my insurance company pay my medical bills due to the accident? Because, Oregon lawmakers decided that folks in car accidents should get medical care without having to first prove who was at fault.
As a result, all Oregon auto insurers (with very limited exceptions) are required to provide at least $15,000 in medical PIP or “Personal Injury Protection” insurance coverage. This coverage pays for “reasonable and necessary” medical coverage related to the crash up to one year. PIP also provides a wage loss benefit. See other blog entries on this website for more information about PIP and how it works.
Your PIP insurer is motivated to show that your injuries are either excessive, not reasonable or otherwise not related to the accident. To do this PIP insurers may ask you to be examined by a doctor of their choosing. If this happens, your PIP insurer is gathering evidence so it can cut off your PIP benefits before the crash anniversary when PIP benefits would normally expire.
- Uninsured / Underinsured Motorist Coverage
You are driving along. Suddenly you are hit. But that’s not all… the guy who hit you has no insurance. Are you stuck?
Probably Not. Your own Oregon policy provides insurance for the bad driver where the bad driver has none. Your own insurer’s surrogate liability insurance in this instance is known as “Uninsured Motorist Coverage”.
“Underinsured Motorist Coverage” is similar to “Uninsured Motorist Coverage”. Underinsurance provides coverage when the bad driver has some insurance, but not enough to cover the loss.
As the Liability Insurer described in #1 above, the “Uninsurer” or “Underinsurer” is motivated to show that your injuries were not that bad. However, the Uninsurer or Underinsurer is almost always also the PIP carrier who wants reimbursement of PIP benefits. As a result, resolving uninsured or underinsured claims without the aid of counsel can be risky and confusing. Also, Oregon case law in this area changes frequently.
Collision coverage under your policy pays for damage to the covered vehicle due to a collision– regardless of fault. This coverage is not required in Oregon so check your policy.
If you have collision coverage, you probably want to have your car fixed by your own insurer, not the insurer for the driver at fault. Your insurer will seek then reimbursement from the driver at fault.