2015 ORS 742.502¹
Uninsured motorist coverage
  • underinsurance coverage

(1) Every motor vehicle liability policy that insures against a loss that a natural person suffers and that results from liability imposed by law for bodily injury or death that arises out of owning, maintaining or using a motor vehicle shall provide in the policy or by indorsement on the policy uninsured motorist coverage if the policy is either:

(a) Issued for delivery in this state; or

(b) Issued or delivered by an insurer that does 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 must 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 must 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 sums that the insured or the heirs or legal representative of the insured is legally entitled to recover as damages for bodily injury or death that is caused by accident and that arises out of owning, maintaining or using an uninsured vehicle. Underinsurance coverage must be equal to the sums that the insured or the heirs or legal representative of the insured is legally entitled to recover as damages for bodily injury or death that is caused by accident and that arises out of owning, maintaining or using an uninsured vehicle up to the limits of the uninsured motorist coverage.

(b) If a named insured elects lower limits, the named insured shall sign a statement to elect lower limits within 60 days after the time the named insured makes the election. The statement must acknowledge that a named insured was offered uninsured motorist coverage with the limits equal to those for bodily injury liability. The statement must have a brief summary that is not part of the insurance contract and that describes what uninsured motorist coverage provides and what the underinsured coverage provides. The summary must also state the price for coverage with limits equal to the named insureds bodily injury liability limits and the price for coverage with the lower limits the named insured requested. The statement remains in force until a named insured rescinds the statement in writing or until the motor vehicle bodily injury liability limits are changed. The Department of Consumer and Business Services shall approve the form of statement that complies with this paragraph.

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

(3) The insurer that issues the policy may offer one or more options of uninsured motorist coverage that are 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 must include underinsurance coverage for bodily injury or death that is caused by accident and that arises out of owning, maintaining or using a motor vehicle with motor vehicle liability insurance that provides recovery in an amount that is less than the sums that the insured or the heirs or legal representative of the insured is legally entitled to recover as damages for bodily injury or death that is caused by accident and that arises out of owning, maintaining or using an uninsured vehicle. Underinsurance coverage must be equal to the sums that the insured or the heirs or legal representative of the insured is legally entitled to recover as damages for bodily injury or death that is caused by accident and that arises from owning, maintaining or using an uninsured vehicle up to the limits of the uninsured motorist coverage.

(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 must provide coverage for bodily injury or death if the amount of liability insurance recovered is less than the sums that the insured or the heirs or legal representative of the insured is legally entitled to recover as damages for bodily injury or death that is caused by accident and that arises out of owning, maintaining or using an uninsured vehicle.

(6) Uninsured motorist coverage and underinsurance coverage must provide coverage for bodily injury or death if the amount recovered from a self-insurer is less than the sums that the insured or the heirs or legal representative of the insured is legally entitled to recover as damages for bodily injury or death that is caused by accident and that arises out of owning, maintaining or using an uninsured vehicle.

(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 30.260 (Definitions for ORS 30.260 to 30.300) to 30.300 (ORS 30.260 to 30.300 exclusive) that are recovered by or on behalf of the injured party. Proceeds recovered on behalf of the injured party include proceeds the injured partys insurer receives as reimbursement for personal injury protection benefits the insurer provides to the injured person, proceeds the medical providers of the injured person receive and proceeds received as attorney fees on the claim of the injured person. If 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 the liability policy that other injured persons receive. [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; 2009 c.67 §14; 2015 c.5 §2]

(formerly 743.789)

See also annota­tions under ORS 743.789 in permanent edi­tion.

Notes of Decisions

Insurers 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 tortfeasors 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 insurers 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 claimants 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), affd 344 Or 196, 179 P3d 633 (2008), modified 345 Or 373, 195 P3d 59 (2008)

Under 2001 version of this sec­tion, phrase Uninsured motorist coverage benefits means uninsured motorist liability limits in policy of insured, not total amount of damages incurred. Vogelin v. American Family Mutual Insurance Co., 346 Or 490, 213 P3d 1216 (2009)

Provision that subjects underinsurance coverage to model policy terms requires model policy terms to apply equally to uninsured motorist and underinsured motorist coverage unless applica­tion of terms is inconsistent with mandate to provide underinsured motorist coverage. Vogelin v. American Family Mutual Insurance Co., 346 Or 490, 213 P3d 1216 (2009)

Insurer may offset tortfeasor liability pay­ment against policy limit for uninsured motorist liability. Vogelin v. American Family Mutual Insurance Co., 346 Or 490, 213 P3d 1216 (2009)

Law Review Cita­tions

34 WLR 327 (1998); 44 WLR 253 (2007)

(formerly 743.786 to 743.795)

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/­ors/­ors742.­html (2015) (last ac­cessed Jul. 16, 2016).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2015, Chapter 742, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano742.­html (2015) (last ac­cessed Jul. 16, 2016).
 
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.