The benefits of having insurance in Oregon -- defense
First, in paying the premiums for the insurance policy, you have already paid for an attorney to represent you in the event you get sued regarding your driving. As long as the allegations made in the plaintiff's Complaint _could_ implicate the coverage of the policy, you are entitled to a defense of the allegations made in the Complaint. See Hartford Acc. & Indem. Co. v. Kaiser, 242 Or. 123, 407 P.2d 899 (1965). The merits or nature of the case against you does not necessarily matter -- even if the other guy is lying about his injuries, or intentionally caused the accident, you still get a lawyer.
The value of legal representation to the policy holder is typically worth far more than the actual indemnification. Hiring a lawyer is not easy, not cheap and typically not very much fun. The insurance company provides an attorney to you to protect your interests, but also to protect their bottom line.
The benefits of having insurance in Oregon -- indemnification
The insurance company will pay on your behalf any judgment imposed against you or any settlement resolving the matter, up to the limits of the insurance policy. The policy limits are usually expressed in "per person" and "per occurrence." For instance, if your coverage is $50,000 per person, $200,000.00 per occurrence, the most that any single person can recover is $50,000.00. The total amount paid per occurrence, which normally means for each accident, to any number of people is $200,000.00. The insurance company has a duty to resolve each claim within the limits of the policy if it can be done. ORS ? 746.230; See Bollam v. Fireman's Fund Ins. Co., 76 Or. App. 267, 709 P.2d 1095, 1100 (1985), rev'd other grounds 302 Or. 343, 730 P.2d 542 (1986).
The consequence of no insurance - traffic violation and license suspension
Every person operating a motor vehicle on the highways of the State is required to have sufficient proof of financial responsibility to a level set by the Legislature. ORS ? 806.010. The typical way to get this proof is by purchasing liability insurance. Driving without this proof is a Class B traffic violation, punishable by a fine of up to $1,000.00, see ORS ? 153.018(2)(b), and your license could be suspended until you can provide such proof - typically through an SR-22 "assigned risk" policy. ORS ? 809.415. Continuing to drive (without insurance) while your license is suspended, this would be another potential traffic violation - driving on a suspended license - as well as another charge of driving without insurance. ORS ? 811.175. The penalty for driving on a suspended license is a fine of up to $2,000.00. ORS ? 153.018(2)(a). Thus, a conviction for driving without insurance will cost you at least as much as getting an insurance policy.
The consequences of no insurance - no pain and suffering damages
The Legislature has adopted a code provision which bars recovery of noneconomic damages in any action for injury or death arising out of the operation of a motor vehicle if the plaintiff does not have liability insurance. ORS ?31.715(1). If you were not at fault in causing an accident - say you were rear-ended while properly sitting at a red light, were injured and required medical attention - but were driving without insurance, you would not be able to claim (or to recover) and pain and suffering damages in Court. Your claim against the person who rear-ended you would be limited to your medical bills and your property damage. This limitation could take away two-thirds of your potential accident-related damages and leave you (technically) economically whole, but leaving you bearing the entire cost of the accident in terms of your pain, suffering, emotional distress, humiliation, injury to reputation, loss of care, comfort, companionship and society, loss of consortium, and the like.
There are other benefits for securing additional insurance in Oregon
The various forms of motor vehicle insurance are beyond the scope of this Guide. However, there are various forms of insurance above and beyond the minimum limits which could avail a person involved in an accident.
First, the minimum limits for car insurance required by the State of Oregon at this time is $25,000 per person, to a limit of $50,000 per occurrence. These limits are the minimum required by law and most people with any assets will want more protection. Second, is higher limits for UM/UIM coverage. This additional coverage will protect you directly in the event that the person who caused you injury does not have insurance (UM) or does not have sufficient coverage (UIM). Third, is comprehensive property damage coverage. This additional coverage will protect your personal property - including the motor vehicle itself - from damage caused in a collision. Fourth, is rental car reimbursement. This coverage will pay for your rental car while your own car is in the shop.
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