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Q. My car insurance company is charging more and my agent said the State of Oregon made them do it. Car insurance is expensive. Why would you make it cost even more?

A. We share your concern about the cost of car insurance. Any changes in car insurance rates are subject to review by actuaries on our staff. Sometimes, changes in the law that are intended to benefit consumers can also affect the cost of insurance. The 2015 Legislature passed Senate Bill 411, which made changes in two required coverages: Personal Injury Protection (PIP) and Uninsured Motorist (UM). Let's take Personal Injury Protection first.

PIP pays for medical expenses, lost income, and other benefits for you and your passengers who get hurt in a car accident. It doesn't matter who is at fault. Before this bill became law, medical expenses had to be incurred within one year. Now, the time period is two years. For example, Jane was hurt in a car accident and had to have physical therapy for 14 months. Under the prior law, her car insurance company would have paid for 12 months and Jane would have had to use other resources for the last two. Now, all 14 months may be paid. There is also a dollar limit, but that was not changed, so the amount available to be paid could be used up before the time limit runs out.

Uninsured Motorist coverage is a little more confusing for most people. If you're hurt in a car accident and someone else is responsible but doesn't have car insurance, then your insurance company steps in and pays what the responsible party's insurance company would have paid. UM also applies if the responsible party doesn't have enough insurance to cover all of your damages. When you buy car insurance, you choose the limits for this coverage. Let's look at a couple of examples.

  1. Jane selected the minimum limits for UM coverage when she bought her policy. The maximum payment is $25,000 for each person injured. She was involved in an accident with Joe and it was determined that he was 100 percent responsible. He does not have car insurance. Her accident was serious and she had hospital bills, doctor bills, lost income, and months of discomfort. Her claim for all damages could be $60,000. Since there is no insurance available from Joe, Jane's company would pay $25,000.
  2. Now let's change the facts. Joe does have insurance, but he also chose minimum limits of $25,000 per person for his liability coverage. His company would pay the $25,000. Under the prior law, Jane's UM limits would not apply because her limits were the same as Joe's. Now, Jane's limits will apply and her insurance company may pay her up to an additional $25,000.

These changes may result in higher claim payments and insurance companies may adjust their rates to cover the increased claim payments. The effect of these changes should be relatively modest, so if you are seeing substantial increases, we suggest asking for a detailed explanation. You may also want to consider shopping for the best combination of coverage, rates, and service.

If you have questions or are having difficulties with your insurance company or agent, our advocates are available at 1-888-877-4894 (toll-free).

Q. I was recently involved in a collision and my insurance company has suggested I take my car to a shop they work with. Do I have to use the repair shop they recommended?

A. No. Oregon law prohibits an insurer from making the use of a certain repair shop a condition for payment. Many insurers have established relationships with repair shops. Some consumers like the idea of a repair network, some don't. It's up to you who repairs your car.

A little history might be helpful. Consumers used to get estimates and send them in to their insurance company. In the 70's many insurance companies established drive in claims services where a consumer could bring the car in and an adjuster would evaluate the damage. In the 90's many insurance companies started direct repair networks, kind of like the preferred provider organizations that we see in health insurance.

Sometimes consumers already have a relationship with a repair shop. If you don't, we suggest you approach your car repair in the same way you would when selecting any product or service. Do your research, ask for referrals, check with the Better Business Bureau and possibly visit more than one repair shop to find the best combination of price and performance.

Once you make your choice, notify your insurer and be sure you have agreement regarding what the shop is charging and what the insurance company will pay before you sign any contract with the repair shop. Oregon administrative rules state an estimate prepared by an insurer or repair shop shall be in the amount for which the damage may reasonably be expected to be satisfactorily repaired. If you choose the most expensive shop in town, the insurance company may not be willing to pay the whole amount.
Q. My husband lost his job and we've been struggling to make ends meet. I had to pay our car insurance payment a few weeks late and now they say my policy is canceled. Aren't insurance companies required to give a 30-day grace period?

A. It's a common misconception that there is a 30-day grace period for paying your car insurance premiums. Oregon law requires 30 days notice of cancellation except for non-payment of premium. Ten days notice is required for non-payment, and typically this is printed on your bill rather than sent as a separate notice. Some companies may choose to allow additional time, but they are not required to do so. Some companies may be willing to reinstate your policy without a lapse of coverage, but again, they are not required to do so.

If your policy cancels for non-payment of premium, and your company is unwilling to reinstate the policy, you may be subject to underwriting. That means your company may review your driving record, credit and other factors to determine whether they will issue a new policy and to determine how much you will be charged.

Sometimes consumers will make partial payments. Partial payments will not generally keep your insurance in force. The policy may be canceled and the partial premium returned to you, sometimes with a deduction for a cancellation fee. Sometimes consumers use automated systems or bring a payment to their agent. If it's a late payment or a partial payment, you still may not have coverage. The worst calls we receive are from consumers who are involved in an accident and find that their policy was canceled for non-payment and they do not have insurance to protect them.

We suggest you review your policy for the cancellation provisions, talk to your agent or company to find out how they handle late payments, and carefully review any billing notice or other notice you receive from your company.

Consumer advocates are available at the Oregon Insurance Division at (888) 877-4894, or you can e-mail your questions to:
Q. My car was damaged in a collision and the insurance company does not want to pay for new factory parts. My car is only four years old, and I want new factory parts. What can I do?

A. I remember as a kid going to see the new car models every fall with my dad. There was a time when car models changed every year, and the only source of crash parts was the car manufacturers. When car models began staying substantially the same for years, other manufacturers entered the crash parts market. In a competitive market place, there are going to be differences in the cost of crash parts. Oregon law allows for the use of after market parts, but there are important safeguards. The part must be certified by an independent test facility to be at least the same quality with respect to fit, finish, function and corrosion resistance as a factory part. The insurance company is also required to provide a warranty for crash parts not made by the original equipment manufacturer.

The use of recycled parts has also become quite common. The parts on your car aren't brand new, they're four years old. If a salvage yard has a car like yours, your insurance company may choose to use a quality recycled part.

The bottom line: Insurers can use aftermarket or recycled parts to keep your insurance costs down only if they meet quality standards to ensure safety. If you have a concern about whether the parts meet quality standards, call the Oregon Insurance Division at 503-947-7984 or toll-free at 1-888-877-4894. E-mail your questions to: An advocate can assist you!
Q. I was on vacation in another state last year and when I went to the car rental desk at the airport they insisted I should buy extra insurance coverage. I had checked with my agent before I left and she said I didn't need to buy extra coverage, so I declined. We're taking another trip this year and I want to be sure I'm covered. Do I need to buy the extra coverage? It's pretty expensive.

A. We've had the same experience with rental car companies. Policy language differs from company to company, but generally, your car insurance covers a rental car in the same way your own car is covered. If you are involved in an accident, you may have coverage for damage to the rental car and you may be protected if you damage another person's vehicle or injure them in an accident. Let's take a look first at damage to the rental car.

If you have physical damage coverage with a $500 deductible on your own car and you are in an accident, you pay the first $500 and your insurance company pays for the rest of the damage. A rented car would be handled the same way, with you paying the first $500. One difference is the rental car company may also want to be paid for loss of rental value, so you'll want to be sure and check with your company to find out if this would be covered. If you don't have physical damage coverage on your own car, the rental company will probably require that you buy the extra coverage.

If you're driving your own car and you injure someone or damage their property, your insurance company will pay damages for which you are legally responsible. The company will also provide an attorney and pay for the cost of defense if legal action is taken against you. Again, most car insurance policies would do exactly the same thing for you if you're driving a rental car.

Some people may choose to buy the extra coverage from the rental car company just to avoid having their own insurance company involved. It's a personal decision whether the cost of the coverage is worth it. We recommend checking with your insurance agent, just as you did last year, and asking specifically how the coverage works. Sometimes there are limitations or exclusions that might apply, particularly if you are renting the car for an extended period of time, using the car for business, or if you're renting a truck or moving van. We've also run into situations where people are traveling together and the person who signs the rental car agreement then allows one of the others to drive. Your own insurance coverage may only apply to you.

One additional suggestion. We understand some credit card companies may also have coverage for rental cars, so we recommend checking with your credit card company as well.
Q. I was involved in an accident and my agent tells me I don't have coverage for renting a car while my car is in the shop. Three years ago, when I bought my car, I told her that I wanted full coverage. Shouldn't that include coverage for a rental car?

A. If ever there was a phrase without a specific meaning, it's full coverage. Car insurance should be tailored to fit the needs of each buyer, and what's appropriate for one person may not be appropriate for another. Let's take a look at what full coverage might mean in different situations.

We'll start with a young person with limited resources and an older car that is paid for. For him, full coverage might be only the minimum required by law. In Oregon, that would be liability insurance to protect him if he's responsible for injuring someone or damaging their property, personal injury protection to cover medical and other expenses for him and his passengers, and uninsured motorist coverage to protect him if he is injured by someone who does not have insurance or does not have adequate limits.

Now let's look at a married couple with a newer car. Full coverage for them might include increasing the limits on their liability and uninsured motorist coverage, and adding physical damage coverage. If they have a car loan, physical damage coverage would be required by the lender. Typically, there are two parts to physical damage coverage, collision to take care of damage caused by collision or roll over, and comprehensive which covers other damage including fire, theft, and vandalism.

With physical damage coverage, there are choices to be made. A higher deductible, for example, may reduce the cost of the coverage but has to be weighed against the buyer's ability to pay the deductible if the car is damaged. Loss of use coverage is also an option and would cover renting a car when your car is in the shop due to a covered loss. If the buyer has a second car or access to public transportation, he or she may not choose to pay the additional premium. Again, full coverage has no real definition. It depends on the person and the circumstances.

A long answer to a short question, but I'll close with a couple of suggestions. We suggest periodically reviewing your insurance policies with your agent or company to be sure you have the protection you need. Ask questions about each coverage and ask what your options are. Also, car insurance policies renew at six- or twelve-month intervals. You will receive a summary of your coverage choices at renewal. Take a few minutes to review them and contact your agent if you need clarification.
Q. We're going Christmas shopping this weekend. It seems like every year we hear about someone who has Christmas presents stolen from their car. Will our car insurance cover this?

A. Before we get into the insurance aspects of this type of loss, the best thing you can do is keep any gifts out of sight. Put them in the trunk or keep them with you until you're ready to go home. If someone does break into your car, your car insurance may cover any damage to the car, but generally will not pay for personal property in your car. Your homeowners or renters policy will cover personal property but it's pretty common for people to have a deductible of $500 or more, and there may be limits on certain types of property.

Let's look at an example. You have just gone to the amazing sale at the mall and you bought $700 worth of electronics and put them on the back seat of your car. You go back in to get that one last gift for your favorite nephew and when you come back, the car door glass is smashed and everything is gone.

Your first call should be to the police and the security office for the mall. Most insurance policies require a police report in order for there to be coverage for theft loss. Then you call your car insurance company. If you have comprehensive coverage on your car, the glass repair will be covered, subject to your deductible.

Your next call is to your homeowners or renters insurance company. They will want a list of the stolen property, and any receipts you have. Hopefully, the receipts are not in the bags with your gifts but safely in your wallet or purse. If you don't have receipts, the store may be able to provide copies or you may have a credit or debit card record. The insurance company will pay for the property, but subject to the deductible for the homeowners policy. If you have a $500 deductible and a $700 loss, you'll receive $200.

This is no way to enjoy the holidays so, again, we strongly recommend doing everything possible to avoid being a target of a car prowler.
Q. I read in my local paper that I may be able to save money on my car insurance if my credit is good. How can I find out more about this?

A. Most insurance companies use credit history to decide whether you're eligible for car or home insurance and also to determine how much to charge. Insurance companies have determined that credit information can predict how likely it is that you will file a claim. The use of credit history is legal in Oregon, but there are important safeguards in Oregon law. Insurance companies may only use credit information for new applicants, and they must also take into account other information like your driving record or claims history. Once the policy is issued, the company cannot use credit information again without your permission.

Until recently, consumers were taking a chance if they asked the insurance company to use updated credit information because it could lead to higher rates. The law has been changed so that a consumer request for the use of current credit information may only be used to reduce rates.

You will need to contact your insurance company or agent to see if you can save money based on current credit information. We recommend doing this in writing so you have proof of making the request.
Q. I'm looking for a new car. A friend of mine said it is a state law that my car insurance will cover the new car as long as I notify my agent within 30 days after I buy it. I called my agent, and she said I should let her know immediately. Is there a law that says I have 30 days?

A. This is a pretty common misconception. There is no statute or rule that requires a car insurance company to allow 30 days for you to notify them that you bought another car. Your policy language will spell out your company's requirements for a newly acquired car. A typical provision is 14 days, but only four days if you don't have physical damage coverage on one of the cars already insured. Your policy may be different, so we suggest looking through your policy for the specific provision, or asking your agent or customer service representative to guide you through it. We had a complaint recently, for example, for an auto policy with a provision that there was no coverage for a newly acquired vehicle unless all cars in the household were insured by the company.

We believe your agent is giving you good advice. The sooner you contact your agent or insurance company, the sooner you can be sure you have the coverage you need. Often a newly acquired vehicle is newer and you may want different coverage than you have on your existing cars. The reverse could also be true. You might be buying an older car that does not need the same coverage. It's also a good opportunity for you to review your coverage choices with your agent or company to be sure you have the best fit for your current situation. If you notify your agent or company by phone, it's a good idea to make a note of the date, time and the name of the person you talked to.

Thanks to Jan Vitus from our Rates and Forms Unit for the policy information.
Q. I was listening to a radio talk show and a question came up regarding insurance for bicycle riders. Is there any requirement for bicycle riders to have insurance? What would happen if I hit a car while riding my bike?

A. We are not aware of any statute or rule that requires someone riding a bicycle to have insurance. If you were responsible for damaging someone's car while riding your bike and you're looking for insurance coverage to pay for the damage, you would have to have personal liability insurance. Personal liability insurance is included with homeowners and renters policies.

Most people think of their homeowners or renters policy in terms of the property coverage. If you have fire damage to your house or your property is stolen, for example, your homeowners policy will pay to repair or replace the damaged property. But what happens if someone gets hurt on your property, or your dog bites someone, or you hit a car while riding a bike? That's when personal liability coverage comes into play. Your insurance company will investigate the circumstances, determine responsibility, and provide a defense in the event of a lawsuit.

There are differences in policy language from company to company, and there are some situations that are not covered, so we suggest reviewing your policy with your agent or customer service representative.
Q. I'm an agent and one of my customers asked me what kind of funeral expenses are included in the Personal Injury Protection coverage of her car insurance policy. She wanted to know if the policy covered cremation or traditional funeral services. Also, if death occurred more than a year after the auto accident, would the funeral expenses still apply?

A. Glad we can help out. Here is the statute regarding funeral expenses under PIP:

ORS 742.524 (d) All reasonable and necessary funeral expenses incurred within one year after the date of the person's injury, but not more than $5,000.

There is no definition of funeral expenses in the statute, so the generally accepted meaning would be used if a consumer was claiming something out of the ordinary. Merriam-Webster dictionary's definition of funeral is "the observances held for a dead person usually before burial or cremation" so we believe cremation or traditional funeral services would be covered. Generally "reasonable and necessary" would be determined by the marketplace.

Expenses must be incurred within one year of the injury. If an injured party lived more than a year after the date of accident and then passed, the benefit for funeral expenses would not be available.

Companies may choose to provide benefits that exceed the minimum requirements, so it's always a good idea to review the policy language.

If you experience difficulties with your insurance company or agent, our advocacy team is available to assist at 1-888-877-4894.​​



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