State Laws for Oregon

This information is not intended to be legal advice. You should consult an attorney if you need legal advice for your particular problem. Although this information is reviewed periodically, please be aware that changes may occur in this area of the law.

ORS 746.110 False, deceptive or misleading statements.

    No person shall make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio or television station, or in any other way, an advertisement, announcement or statement containing any assertion, representation or statement with respect to the business of insurance or with respect to any person in the conduct of the insurance business, which is untrue, deceptive or misleading.
ORS 746.230 Unfair claim settlement practices.

(1) No insurer or other person shall commit or perform any of the following unfair claim settlement practices:
    (a) Misrepresenting facts or policy provisions in settling claims;
    (b) Failing to acknowledge and act promptly upon communications relating to claims;
    (c) Failing to adopt and implement reasonable standards for the prompt investigation of claims;
    (d) Refusing to pay claims without conducting a reasonable investigation based on all available information;
    (e) Failing to affirm or deny coverage of claims within a reasonable time after completed proof of loss statements have been submitted;
    (f) Not attempting, in good faith, to promptly and equitably settle claims in which liability has become reasonably clear;
    (g) Compelling claimants to initiate litigation to recover amounts due by offering substantially less than amounts ultimately recovered in actions brought by such claimants;
    (h) Attempting to settle claims for less than the amount to which a reasonable person would believe a reasonable person was entitled after referring to written or printed advertising material accompanying or made part of an application;
    (i) Attempting to settle claims on the basis of an application altered without notice to or consent of the applicant;
    (j) Failing, after payment of a claim, to inform insureds or beneficiaries, upon request by them, of the coverage under which payment has been made;
    (k) Delaying investigation or payment of claims by requiring a claimant or the physician of the claimant to submit a preliminary claim report and then requiring subsequent submission of loss forms when both require essentially the same information;
    (L) Failing to promptly settle claims under one coverage of a policy where liability has become reasonably clear in order to influence settlements under other coverages of the policy; or
    (m) Failing to promptly provide the proper explanation of the basis relied on in the insurance policy in relation to the facts or applicable law for the denial of a claim.


(2) No insurer shall refuse, without just cause, to pay or settle claims arising under coverages provided by its policies with such frequency as to indicate a general business practice in this state, which general business practice is evidenced by:
    (a) A substantial increase in the number of complaints against the insurer received by the Department of Consumer and Business Services;
    (b) A substantial increase in the number of lawsuits filed against the insurer or its insureds by claimants; or
    (c) Other relevant evidence.


ORS 746.280 Designation of particular motor vehicle repair shop by insurer prohibited.

    An insurer shall not require that a particular person make the repairs to the insured's motor vehicle as a condition for recovery by the insured under a motor vehicle liability insurance policy.


ORS 746.287 Insurer requirement of installation of aftermarket crash part in vehicle.

    (1) Without the consent of the owner of the vehicle, an insurer may not require, directly or indirectly, that a motor vehicle body and frame repair shop supply or install any aftermarket crash part unless the part has been certified by an independent test facility to be at least equivalent to the part being replaced.
    (2) For purposes of this section, an aftermarket crash part is at least equivalent to the part being replaced if the aftermarket crash part is the same kind of part and is at least the same quality with respect to fit, finish, function and corrosion resistance.


ORS 746.289 Insurer offer of crash part warranty.

    Any insurer which offers a motor vehicle insurance policy that provides coverage for repair of the vehicle shall make available to its insured a crash part warranty for crash parts not made by the original equipment manufacturer as described in ORS 746.292 when the insured requests one.


ORS 746.292 Motor vehicle repair shops; invoices; estimates; warranties; prohibited practices.

    (1) All work done by a motor vehicle body and frame repair shop shall be recorded on an invoice and shall describe all service work done and parts supplied. If any used parts are supplied, the invoice shall clearly state that fact. If any component system installed is composed of new and used parts, such invoice shall clearly state that fact. One copy of the invoice shall be given to the customer and one copy shall be retained by the motor vehicle body and frame repair shop.

    (2) Before commencing repair work and upon the request of any customer, a motor vehicle body and frame repair shop shall make an estimate in writing of the parts and labor necessary for the repair work, and shall not charge for the work done or parts supplied in excess of the estimate without the consent of such customer.

    (3)(a) If crash parts to be used in the repair work are supplied by the original equipment manufacturer, the parts shall be accompanied by a warranty that guarantees the customer that the parts meet or exceed standards used in manufacturing the original equipment.
    (b) If crash parts to be used in the repair work are not supplied by the original equipment manufacturer, the estimate shall include a statement that says:
    "This estimate has been prepared based on the use of a motor vehicle crash part not made by the original equipment manufacturer. The use of a motor vehicle crash part not made by the original equipment manufacturer may invalidate any remaining warranties of the original equipment manufacturer on that motor vehicle part. The person who prepared this estimate will provide a copy of the part warranty for crash parts not made by the original equipment manufacturer for comparison purposes."

    (4) No motor vehicle body and frame shop may:

    (a) Supply or install used parts, or any component system composed of new and used parts, when new parts or component systems are or were to be supplied or installed.

    (b) Supply or install, without the owner's consent, any aftermarket crash part unless the part has been certified by an independent test facility to be at least equivalent to the part being replaced. For purposes of this paragraph, an aftermarket crash part is at least equivalent to the part being replaced if the aftermarket crash part is the same kind of part and is at least the same quality with respect to fit, finish, function and corrosion resistance.

    (c) Charge for repairs not actually performed, or add the cost of repairs not actually to be performed to any repair estimate.

    (d) Refuse any insurer, or its insured, or their agents or employees, reasonable access to any repair facility for the purpose of inspecting or reinspecting the damaged vehicle during usual business hours.

    (5) As used in ORS 746.287 and this section, "aftermarket crash part" means a motor vehicle replacement part, sheet metal or plastic, that constitutes the visible exterior of the vehicle, including an inner or outer panel, is generally repaired or replaced as the result of a collision and is not supplied by the original equipment manufacturer.


OAR 836-080-0235 Standards for Prompt and Fair Settlements -- Generally

    (1) An insurer shall, not later than the 30th day after its receipt of properly executed proofs of loss from a first party claimant, advise the claimant of the acceptance or denial of the claim. An insurer shall not deny a claim on the grounds of a specific policy provision, condition or exclusion unless the denial includes reference to the provision, condition or exclusion. A claim denial must be in writing, with either a copy or the capability of reproducing its text included in the insurer's claim file.

    (2) If a claim is made on a health insurance policy and the claim involves a coordination of benefits issue to which OAR 836-020-0700 to 836-020-0765 apply, the time allowed in OAR 836-020-0740 to an insurer for applying a coordination of benefit provision shall added to the time period provided in section (1) of this rule.

    (3) If a claim is denied for reasons other than those described in section (1) of this rule and is made by any other means than in writing, an appropriate notation shall be made in the insurer's claim file.

    (4) If an insurer needs more time to determine whether the claim of a first party claimant should be accepted or denied, it shall so notify the claimant not later than the 30th day after receipt of the proofs of loss, giving the reason more time is needed. Forty-five days from the date of such initial notification and every 45 days thereafter while the investigation remains incomplete, the insurer shall notify the claimant in writing of the reason additional time is needed for investigation.

    (5) An insurer shall not fail to settle claims of first party claimants on the grounds that responsibility for payment should be assumed by others, except as may be provided otherwise by the provisions of the insurance policy issued by the insurer.

    (6) If an insurer continues negotiations for settlement of a claim directly with a claimant who is neither an attorney nor represented by an attorney until the claimant's rights may be affected by a statute of limitations or policy time limit, the insurer shall give the claimant written notice that the time limit may be expiring and may affect the claimant's rights. The notice shall be given to first party claimants not less than 30 days before, and to third party claimants not less than 60 days before, the date on which the insurer believes the time limit may expire.

    (7) An insurer shall not make a statement that indicates that the rights of a third party claimant may be impaired if a form or release is not completed within a given period of time, unless the statement is given for the purpose of notifying the third party claimant of the provision of a relevant statute of limitations.



OAR 836-080-0240 Standards for Prompt and Fair Settlements -- Automobile Insurance

    (1) When an automobile insurance policy provides for the adjustment and settlement of collision or comprehensive coverage total losses on the basis of actual cash value or replacement with another comparable automobile or one of like kind and quality, the insurer shall adjust and settle the claim as provided in this rule.

    (2) The insurer may elect to offer a replacement automobile that is at least comparable to the insured automobile. A replacement automobile is at least comparable if it is the same make, is of the same or a newer year, is of a similar body style, has similar options and mileage as the insured automobile, is in as good or better overall condition and is available for inspection within a reasonable distance of the insured's residence. The insurer shall pay all applicable taxes, license fees and other fees incident to the transfer of evidence of ownership of the automobile at no cost other than any deductible provided in the policy. The offer and any rejection thereof must be documented in the claim file.

    (3) The insurer may elect to make a cash settlement, less any deductible provided in the policy, but including all applicable taxes, license fees and other fees incident to transfer of ownership of another comparable automobile. When an insurer makes a cash settlement, if the insured so requests, the insurer shall furnish the insured copies of the information used by the insurer for the purpose of determining the amount of the cash settlement. If the information includes documentation of a specific and comparable automobile that the insurer intends to rely upon to preclude reopening the claim file under section (4) of this rule, the insurer shall prominently disclose that intention. The value of the automobile for purposes of a cash settlement may be based upon one of the following standards:

    (a) A valuation obtained from a computerized database source that produces statistically valid and fair market values for automobiles, on the basis of the following criteria:

    (A) The source shall produce values for at least 85 percent of all makes and models of private passenger automobiles for the last 15 model years;
    (B) The source shall rely upon values of vehicles that are currently available or were available within the last 90 days from the date of loss for all vehicles and shall apply appropriate standards of comparability; and
    (C) For all vehicles of five model years or less of age, the values must be derived primarily from verifiable data or inventory from licensed dealers;
    (D) The source shall monitor the average retail price of private passenger automobiles when there is insufficient data or inventory from licensed dealers to ensure statistically valid market area values;
    (E) The source shall give primary consideration to the values of vehicles in the local market area and may consider data on vehicles outside the area; and
    (F) The source shall produce fair market values based on current data available from the area surrounding the location where the insured vehicle was principally garaged or a necessary expansion of parameters, such as time and area, to assure statistical validity.

    (b) The actual cost to purchase the automobile identified by the insurer as a replacement automobile that is at least comparable to the insured automobile as determined pursuant to section (2) of this rule, including all applicable taxes, license fees and other fees incident to purchase of the automobile other than any deductible provided in the policy; or

    (c) An alternative that deviates from the methods described in subsections (a) and (b) of this section and is allowable under the policy, as long as documentation in the claim file supports the deviation and gives particulars of the pre-loss condition of the automobile. Any deductions from the cost, including deduction for salvage if the salvage is retained by the claimant, must be measurable, discernible, itemized and specified as to dollar amount and must be appropriate in amount. The basis for such a settlement must be fully explained in writing, supplied to the claimant and maintained in the claim file.


    (4) If the insured notifies the insurer within 35 days of the receipt of the claim draft that the insured cannot purchase an automobile for the market value as determined in section (3) of this rule, the insurer shall reopen its claim file and the following procedures shall apply:

    (a) The insurer may locate an automobile that is at least comparable to the insured automobile as determined pursuant to section (2) of this rule, and that is currently available for the market value determined by the insurer at the time of settlement;

    (b) The insurer may either pay the insured the difference between the market value before applicable deductions and the cost of the comparable automobile of like kind and quality that the insured has located, or negotiate and effect the purchase of the automobile for the insured;

    (c) The insurer may elect to offer a replacement automobile in accordance with the provisions set forth in section (2) of this rule; or

    (d) The insurer may conclude the loss settlement in the manner provided in the appraisal section of the insurance policy in force at the time of the loss.


    (5) The right of the insured to have a claim reopened under section (4) of this rule applies only to first party claims of the insured under the policy. The insurer is not required to take action under section (4) of this rule if its documentation to the insured at the time of settlement includes written notification of the availability and location of a specified automobile that is at least comparable to the insured automobile as determined pursuant to section (2) of this rule, that could have been purchased for the market value determined by the insurer before applicable deductions. The documentation shall include the vehicle identification number or another specific vehicle identifier.

    (6) When the issue of liability is reasonably clear, an insurer shall not recommend that a third party claimant make claim under the claimant's own insurance policy solely for the recommending insurer to avoid paying a claim.

    (7) An insurer shall not require unreasonable travel of a claimant to inspect a replacement automobile, to obtain a repair estimate or to have the automobile repaired at a repair shop.

    (8) An insurer shall, upon a first party claimant's request, include the claimant's deductible in the insurer's demands under its subrogation rights. Subrogation recoveries shall be shared at least on a proportionate basis with the first party claimant, unless the deductible amount has been otherwise recovered by the claimant. No deduction for expenses may be made from the deductible recovery unless an outside attorney is retained to collect such recovery, in which case deduction may be made only for a pro rata share of the cost of retaining the attorney.

    (9) If an insurer or body shop prepares an estimate of the cost of automobile repairs, the estimate shall be in the amount for which the damage may reasonably be expected to be satisfactorily repaired. If crash parts manufactured by anyone other than the original manufacturer are to be supplied or installed, the estimate shall identify each such part in a clearly understandable manner. The insurer or body shop shall give a copy of the written estimate to the claimant.

    (10) As provided in ORS 746.280, an insurer shall not require that a particular person make the repairs to the first party claimant's automobile as a condition for recovery under the claimant's policy. An insurer shall not make such a requirement for the repair of a third party claimant's automobile as a condition for claim payment.

    (11) When the amount claimed as automobile damage is reduced because of betterment or depreciation, all information used as the basis for the reduction shall be contained in the insurer's claim file. Such deductions shall be itemized and specified as to dollar amount and shall be appropriate for the amount of betterment or depreciation.



CASELAW:


Insurance underwriter must exercise good faith and due care in the negotiations and settlement of claims in behalf of its insured. The insurer has duty to exercise at least the same degree of care as to the insured's interest as it exercises as to its own. Grumbling v. Medallion Ins. Co., 392 F. Supp. 717 (1975).


It is not necessary that a plaintiff actually incur expense in acquiring a substitute automobile in order to recover damages for loss of use caused by the negligence of a defendant. Graf v. Don Rasmussen Co., 39 Ore. App. 311, 592 P. 2d 250 (1979).

Hillsboro Shop

503-640-0599

810 SW Adams Ave.

Hillsboro, OR 97123