Smart consumers purchase uninsured motorist coverage when they buy insurance for their car. With so many uninsured drivers on the road this coverage is a must. Not only are there more uninsured drivers on the road now than in the past, many who do carry insurance buy the cheapest coverage possible. Most states set thresholds for the lowest coverage you can purchase and still legally drive. Sometimes referred to as “full coverage policies”, or being “fully covered under the law”, it actually means quite the opposite. It means you bought the least you can get away with to fully comply with Washington and Oregon’s minimum coverage requirement. So even though you are “fully covered” under the law, you really have very little insurance in case something goes wrong. A “full coverage” policy in either state means you only have to carry $25,000 in liability coverage. This figure hasn’t changed since the 1970s and $25,000 buys a lot less in medical bills if you injure someone now than back in the 1970s. This brings us back to why uninsured motorist coverage is so important. In Washington if you are injured by another driver who has one of these “full coverage” policies, the most you’ll get from his insurance carrier is $25,000, no matter how bad you’re injured. However, if you bought uninsured (which really becomes underinsured in these situations) motorist coverage on your policy, you can ask your company to make up the difference between what the other side had in insurance and the actual value of your claim. Of course, if you only purchased uninsured motorist coverage of $25,000, that’s the most your company will pay, regardless of how much more your claim is worth. But at least you’re better off than your Oregon neighbor. Oregon consumers actually would get nothing from their own insurance company under these facts. That’s because the Oregon Supreme Court just ruled in February that your company has a right to subtract from your coverage whatever coverage the other driver had. Meaning if his liability coverage was equal or more than your uninsured motorist coverage, you end up with zero from your policy. Instead of a combined recovery of $50,000 from each company, you’d end up with nothing from your company. Meaning you recover only half of what your neighbor to the north does. The underinsured coverage you bought is useless. Another reason to buy even higher underinsured coverage if you reside in Oregon.
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