2007 Legislation

House bills

HB 2384 (ch 131) Uninsured motorist coverage

HB 2384 deals with the interaction between a driver's motor vehicle liability insurance policy and a passenger's policy when the passenger is injured by a third party that is uninsured. Under ORS 742.504, the driver's uninsured motorist coverage is primary and pays first for the passenger's damages up to policy limits, and the passenger's policy pays second but only if the passenger has higher limits (i.e., if both the driver and passenger have the same limits, the passenger's policy will not pay). HB 2384 makes it clear that the passenger's policy is available where damages exceed the driver's limits and the passenger has higher limits.

Effective May 9, 2007.

HB 2385 (ch 287) Self-insurers; motor vehicle liability insurance coverage for permitted users

HB 2385 requires self-insurers (e.g., rental car companies and car dealerships) to provide motor vehicle liability insurance coverage for their customers or other permitted users to meet the minimum financial responsibility requirements under the Motor Vehicle Code ($25,000 for bodily injury per person, $50,000 for bodily injury per accident, $10,000 for property damage per accident, and uninsured motorist coverage). Before this change, self-insurers had to meet minimum financial responsibility requirements under the Motor Vehicle Code, but they were not required to provide the same coverage for their customers or other permitted users.

HB 2385 also requires that an insured’s uninsured motorist coverage and underinsurance coverage provide for recovery if the amounts recovered from a self-insurer are less than the limits for uninsured motorist coverage of the insured. Finally, the bill provides that the insurance coverage of the self-insurer's customer or other permitted user will pay first on a claim and the self-insurer will pay second.

Effective June 1, 2007.

HB 2654 (ch 648) Increased protection in residential construction

HB 2654 combines legislative proposals by the Construction Claims Task Force, which was created in 2005 legislation, to do the following:

  1. Increases liability insurance coverage to include coverage for a contractor’s liability arising after completion of the construction project.
  2. Applies continuing education requirements for all persons licensed by the Construction Contractors Board.
  3. Requires a written contract that prohibits an original contractor from claiming a lien arising from improvement of real property if the contractor does not have a written contract for work when it is required.
  4. Requires a contractor for a new residential structure or zero-lot-line dwelling to offer a warranty to the first purchaser or owner of the structure or dwelling in writing.
  5. Compels a contractor for a new residential structure or zero-lot-line dwelling to furnish a recommended maintenance schedule to the first purchaser or owner.
  6. Increases bonding requirements for general contractors, licensed developers, specialty contractors, inspectors and limited contractors.

This bill implements recommendations from the Construction Claims Task Force, which was created in 2005 legislation.

HB 2751 (ch 210) Contractor liability insurance, grouping authority

HB 2751 amends ORS 737.600 to exempt contractor liability insurance from the statutory prohibition against “fictitious grouping” in order to allow authorized insurers to compete in the market for group project liability insurance. “Fictitious grouping” is defined in ORS 737.600 to mean a grouping of persons for casualty insurance purposes by membership, agreement or method other than common ownership or common use and control. This market has been dominated by surplus lines carriers who are not subject to the limitations in the Insurance Code. The exemption will most affect project-based insurance on large construction projects. This bill implements a recommendation from the Construction Claims Task Force, which was created in 2005 legislation.

Effective: May 30, 2007.

HB 2783 (ch 656) Workers’ compensation insurance; termination of coverage

HB 2783 increases from 30 to 45 days the notice that an insurer must give the DCBS director and an employer when the insurer seeks to terminate its liability under a guaranty contract or surety bond issued to the employer in connection with workers’ compensation insurance coverage. This notice requirement applies except when termination is based on the insurer’s decision not to offer coverage within a specific premium category or if termination is based on nonpayment of premium. The bill provides that for nonpayment, the notice requirement is 10 days.

Effective: Jan. 1, 2008.

HB 2908 (ch 457) Motor vehicle insurance, uninsured motorist coverage

HB 2908 allows a person who is injured by a motor vehicle of a public body to recover from the person’s own uninsured motorist coverage when the person suffers damages greater than the amount the person is able to recover from the public body. Prior to this change, the person would be able to recover only an amount up to the maximum statutory limits on damages payable by a public body under the Oregon Tort Claims Act. Under this bill, an injured person’s uninsured motorist coverage must pay the difference if the coverage exceeds the maximum recoverable from the public body.

HB 3086 (ch 782) Motor vehicle insurance, family exclusion

HB 3086 requires a motor vehicle liability insurance policy to provide liability coverage for each family member of the insured living in the same household, in an amount equal to the amount of coverage purchased by the insured. HB 3086 also deals with the same issue addressed in HB 2908, regarding recovery by a person who is injured by a motor vehicle of a public body.

HB 3490 (ch 692)​ Personal Injury Protection benefits

HB 3490 allows an insurer, upon receipt of a proof of loss, to make immediate payment of personal injury protection benefits for medical services under a motor vehicle insurance policy and to get repayment from the provider of the services if it later turns out that the insurer was not responsible for the payment. To obtain repayment, the insurer must send the provider a notice and an explanation of the incorrect payment. The provider must then promptly repay the insurer.​​​​​​​​​​​​