ORS 742.502¹
Uninsured motorist coverage
  • underinsurance coverage

(1) Every motor vehicle liability policy insuring against loss suffered by any natural person resulting from liability imposed by law for bodily injury or death arising out of the ownership, maintenance or use of a motor vehicle shall provide in the policy or by indorsement on the policy uninsured motorist coverage when the policy is either:

(a) Issued for delivery in this state; or

(b) Issued or delivered by an insurer doing business in this state with respect to any motor vehicle then principally used or principally garaged in this state.

(2)(a) A motor vehicle bodily injury liability policy shall have the same limits for uninsured motorist coverage as for bodily injury liability coverage unless a named insured in writing elects lower limits. The insured may not elect limits lower than the amounts prescribed to meet the requirements of ORS 806.070 (Minimum payment schedule) for bodily injury or death. Uninsured motorist coverage shall include underinsurance coverage for bodily injury or death caused by accident and arising out of the ownership, maintenance or use of a motor vehicle with motor vehicle liability insurance that provides recovery in an amount that is less than the insured’s uninsured motorist coverage. Underinsurance coverage shall be equal to uninsured motorist coverage less the amount recovered from other motor vehicle liability insurance policies.

(b) If a named insured elects lower limits, the named insured shall sign a statement electing lower limits within 60 days of the time the named insured makes the election. The statement shall acknowledge that a named insured was offered uninsured motorist coverage with the limits equal to those for bodily injury liability. The statement shall contain a brief summary, which may not be construed as part of the insurance contract, of what uninsured and underinsured motorist coverages provide and shall state the price for coverage with limits equal to the named insured’s bodily injury liability limits and the price for coverage with the lower limits requested by the named insured. The statement shall remain in force until rescinded in writing by a named insured or until the motor vehicle bodily injury liability limits are changed. The form of statement used to comply with this paragraph shall be approved by the Department of Consumer and Business Services.

(c) A statement electing lower limits need not be signed when vehicles are either added to or subtracted from a policy or when the policy is amended, renewed, modified or replaced by the same company or group of companies under common ownership or control unless the liability limits of the policy are changed.

(3) The insurer issuing the policy may offer one or more options of uninsured motorist coverage larger than the amounts prescribed to meet the requirements of ORS 806.070 (Minimum payment schedule) and in excess of the limits provided under the policy for motor vehicle bodily injury liability insurance. Offers of uninsured motorist coverage shall include underinsurance coverage for bodily injury or death caused by accident and arising out of the ownership, maintenance or use of a motor vehicle with motor vehicle liability insurance that provides recovery in an amount that is less than the insured’s uninsured motorist coverage. Underinsurance coverage shall be equal to uninsured motorist coverage less the amount recovered from other motor vehicle liability insurance policies.

(4) Underinsurance coverage is subject to ORS 742.504 (Required provisions of uninsured motorist coverage) and 742.542 (Effect of personal injury protection benefits paid).

(5) Uninsured motorist coverage and underinsurance coverage shall provide coverage for bodily injury or death when:

(a) The limits for uninsured motorist coverage of the insured equal the limits of the liability policy of the person whose fault caused the bodily injury or death; and

(b) The amount of liability insurance recovered is less than the limits for uninsured motorist coverage of the insured.

(6) Uninsured motorist coverage and underinsurance coverage shall provide coverage for bodily injury or death if the amount recovered from a self-insurer is less than the limits for uninsured motorist coverage of the insured.

(7) As used in this section and except as otherwise provided in this subsection, "amount recovered from other motor vehicle liability insurance policies" means the proceeds of liability insurance or the proceeds received from a public body under ORS 30.270 (Amount of liability) recovered by or on behalf of the injured party. Proceeds recovered on behalf of the injured party include proceeds received by the injured party’s insurer as reimbursement for personal injury protection benefits provided to the injured person, proceeds received by the medical providers of the injured person and proceeds received as attorney fees on the claim of the injured person. Where applicable liability insurance policy limits are exhausted upon payment, settlement or judgment by division among two or more injured persons, "amount recovered from other motor vehicle liability insurance policies" means the proceeds that are recovered by or on behalf of the injured person but does not include any proceeds of that liability policy received by other injured persons. [Formerly 743.789; 1993 c.709 §11; 1997 c.808 §1; 2003 c.220 §1; 2005 c.235 §1; 2007 c.287 §2; 2007 c.782 §2]

See also annota­tions under ORS 743.789 in permanent edi­tion.

Notes of Decisions

Insurer's notifica­tion of availability of increased uninsured motorist coverage satisfied require­ment of "offer" under this sec­tion. Beck v. Powell, 113 Or App 318, 832 P2d 1254 (1992), Sup Ct review denied

Underinsured motorist limits can be calculated without conflict with ORS 742.542 (Effect of personal injury protection benefits paid). Yokum v. Farmers Ins. Co., 117 Or App 546, 844 P2d 937 (1993), Sup Ct review denied

Underinsured motorist coverage applies only where dollar amount of tortfeasor's policy is exceeded, notwithstanding that recovery limita­tions imposed by law may prevent full recovery of damages. Dasteur v. American Economy Ins. Co., 127 Or App 686, 874 P2d 85 (1994), Sup Ct review denied

Whether car is underinsured is determined by comparing per accident policy limita­tions, not per per­son policy limita­tions. Windsor Ins. Co. v. Judd, 321 Or 379, 898 P2d 761 (1995)

Where policy was initially issued prior to effective date of 1993 amend­ments to this sec­tion, appropriate remedy for insurer's failure to make re­quired offering of uninsured motorist coverage is to read into insurance contract coverage insurer should have offered. Savage v. Grange Mutual Insurance Co., 158 Or App 86, 970 P2d 695 (1999), Sup Ct review denied

Failure of insurer to offer increased uninsured motorist insurance at time of policy issuance dictates imputing increased coverage, notwithstanding policyholder elec­tion at sub­se­quent time to dec­line increased coverage. Buccino v. California Casualty Insurance Co., 159 Or App 654, 978 P2d 441 (1999), Sup Ct review denied

For single-limit policy, amount recoverable by insured as underinsured or uninsured motorist benefit is subject to offset only by those amounts paid by other sources on account of injury to that individual insured. Grijalva v. Safeco Insurance Co., 329 Or 36, 985 P2d 784 (1999)

Statutory exclusion of insured vehicles from defini­tion of uninsured vehicle in ORS 742.504 (Required provisions of uninsured motorist coverage) is applicable to underinsured motorist coverage. Wright v. State Farm Mutual Automobile Insurance Co., 332 Or 1, 22 P3d 744 (2001)

Where multiple claimants obtain recovery under liability policy, pro­vi­sions of this sec­tion allowing recovery equal to amount by which underinsured motorist insurance exceeds claimant's recovery supersede require­ment of this sec­tion that damages or death arise from vehicle insured for less than amount of underinsured motorist coverage. Takano v. Farmers Insurance Co., 184 Or App 479, 56 P3d 491 (2002), Sup Ct review denied

Under 2001 version of statute, whether tortfeasor was underinsured was determined by comparing insurance policy limit of tortfeasor with policy limit of insured. Mid-Century Insurance Co. v. Perkins, 209 Or App 613, 149 P3d 265 (2006), Sup Ct review allowed

Law Review Cita­tions

34 WLR 327 (1998)

Notes of Decisions

These statutes apply to umbrella policies that insure against loss arising from use of automobile. American Economy Ins. Co. v. Canamore, 114 Or App 348, 834 P2d 542 (1992), Sup Ct review denied

Law Review Cita­tions

24 WLR 948 (1988)

1 Legislative Counsel Committee, CHAPTER 742—Insurance Policies Generally; Property and Casualty Policies, https://­www.­oregonlegislature.­gov/­bills_laws/­Archive/­2007ors742.­pdf (2007) (last ac­cessed Feb. 12, 2009).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2007, Chapter 742, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­742ano.­htm (2007) (last ac­cessed Feb. 12, 2009).
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent. Currency Information