Oregon Legislature Ends Reduced Coverage of Family Members

Until 2007, insurance companies routinely provided an “exclusion” for coverage of family members how were injured in accidents in which another family member was at fault.

Essentially, insurance companies would sell a policy with, for example, $100,000 of coverage for bodily injuries caused by the insured persons negligence.  However, these policies contained an “exclusion” that provided no bodily injury coverage for other persons who were also insured under the same policy.  In cases where the insured person was at fault and involved in an accident that caused injury to a family member who was a passenger, that family member was, technically, also an insured person under the policy.  The only saving grace for this exclusion was that it didn’t affect the mandatory minimum coverage required under Oregon law: $25,000 of coverage per person and $50,000 per accident.  So, in this scenario, a family member injured by another family member in an accident would have only $25,000 in coverage available instead of $100,000.

Most people didn’t discover this hidden exclusion until they tried to collect the full amount of the coverage, since this language was buried in the policy fine print.

In 1991, the Oregon Supreme Court, in the case of Collins v. Farmers Insurance, held that this type of exclusion was allowed under Oregon law.

In 2007, the Oregon Trial Lawyers Association successfully lobbied the legislature to put an end to this practice.  House Bill 3086 expressly amended Oregon law to forbid insurance companies from sneaking in liability limitations for family members.  That law has been in effect for all policies issued after the law went into effect.

As an Oregon Personal Injury Lawyer, James F. O’Rourke, Jr. helps defend injured people from unfair and deceptive practices by insurance companies.  We aggressively pursue all available insurance policies in seeking fair compensation for our clients.