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Senate Democrats Vote to Boost Injury Protection from Auto Insurance

Given a new supermajority by voters, Senate Democrats continue to check off legislation that passed the more liberal House in 2013 but died in the Senate. SB 411 brings Oregon more in line with other states and allows injured people to use money from both parties’ auto insurance policies in case of an accident, but it will likely raise premiums slightly.
February 26, 2015

The Oregon Senate passed a bill Tuesday aimed at giving people injured in car accidents a better guarantee that their medical treatment will be covered by auto insurance policies.

Senate Bill 411 takes two actions to bring Oregon auto insurance law in line with other states -- it allows an injured person to receive the full benefit both of their own policy and the injury protection of the driver who caused the accident. It also requires the at-fault motorists’ insurance to pay the injured party’s claims first, before paying back money the other motorist’s insurance paid out for personal injury protection.

Under current law, if the person who didn’t cause the accident is injured and has insurance that paid expenses while waiting to settle up with the liable party, the injured person’s insurance company must be repaid first before the victim can see any money from the insurance of the driver who caused the accident.

Current law also requires the liable motorists’ injury coverage to be deducted from the non-liable party’s coverage for underinsurance, so that if each party is insured against injuries for $25,000, only $25,000 will be available for the injured person. Under the new policy, $50,000 would be made available for medical expenses.

The personal injury protection fund can be used for wage loss, non-economic and vehicular damage as well as medical bills.

Sen. Chip Shields, D-Portland, helped bring SB 411 forward on behalf of a constituent, elementary teacher Dahleen McElhaney, who was badly injured in an accident near Madras that put her in the hospital for nearly a month and a wheelchair for four months. She didn’t walk again for 18 months, and still gets around with a limp.

Despite paying for a $300,000 policy, the other motorist had only a $100,000 policy, which was deducted from her insurance, leaving her $85,000 short when it came to paying her $285,000 in medical bills.

“The current system delivers a blow to people when they are most vulnerable,” Shields told his colleagues.

SB 411 reflects a change in policy that has taken a sharply partisan course through the Oregon Legislature in both the 2013 and 2015 sessions. In 2013, a similar bill, House Bill 2821, was among a flurry of bills which Democrats pushed that passed the House but fell apart in the Senate because of the opposition of conservative Scappoose Democrat Sen. Betsy Johnson.

Johnson again opposed SB 411, but the new Democratic supermajority this time meant her vote didn’t matter.

Ironically, the only Republican to have voted in support of the legislation so far in either session has been Rep. Dennis Richardson, R-Central Point, an attorney who would become the Republican’s 2014 gubernatorial candidate. Richardson served as the vice-chairman of the House Consumer Protection and Government Efficiency Committee in 2013 and supported HB 2821 both in the committee and on the House floor.

Senate Republicans this year argued that SB 411 would raise people’s auto insurance rates and come down hardest on low-income people, who would be encouraged to just drive without auto insurance and leave everyone at risk.

In its press release, the Republicans went so far as to argue that urban Democrats were conspiring to push people onto mass transit while lining the pockets of the Oregon Trial Lawyers Association, which supported the bill.

“Senate Republicans are concerned that Portland-centric transportation mandates, designed to increase the cost of driving in order to force more Oregonians into mass transit options, disproportionately harms low-income and rural Oregonians with fewer transportation options,” read the release from spokeswoman Caitie Osborne.

John Powell, the lobbyist for State Farm Insurance, the largest auto insurer in the state, testified before the Senate Business and Transportation Committee earlier this month that SB 411 would raise the cost of the average auto insurance policy by $55 a year. An analysis from the Oregon Insurance Division put the figure at $51, partly drawn from the State Farm assumptions. Riskier drivers would pay more.

“There are many Oregonians who can take that kind of hit, but low-income families cannot,” said Sen. Chuck Thomsen, R-Hood River.

But Sen. Sara Gelser, D-Corvallis, countered that the majority of states already have the policy endorsed in SB 411, and a majority of their low-income residents buy auto insurance. And if poor people get in an accident, unless they qualify for the Oregon Health Plan, they’re the ones least likely to afford medical bills that auto insurers don’t cover. “Our low-income constituents need this protection the most,” Gelser said.

The increased protection from auto insurance will also provide security to people worried about affording hospital and ambulance costs that are the result of an accident, since regular medical insurance only kicks in when injury protection from auto insurance runs out.

Sen. Elizabeth Steiner Hayward, a Beaverton Democrat and family physician, said she recently had a bicyclist in her care who was hit by a car but refused to report the incident to the police in case his health insurance wouldn’t pick up the tab, and he had to fight the driver’s auto insurance for the money. “Health coverage will not pay for medical claims until all personal injury protections have been exhausted,” she said.