Oregon Auto Insurance Bill Goes to Governor

The Oregon State Legislature voted to pass SB 523, titled Relating to motor vehicle liability insurance, on to Gov. Ted Kulongoski on June 5. If approved by the governor, SB 523 will become law.

The bill addresses, in detailed language, the necessity of insurers to notify insureds of their right to choose a repair facility, while also stating that an insurer may not limit the cost of repairs to return a vehicle to pre-loss condition.

If passed, Oregon Bill 523 would outline specific requirements overseeing the recommendations of certain repair facilities by insurance companies. The proposed bill contains changes from a previous version, including changing the word "shall" for the work "may" in the following excerpt:

"An insurer may 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."

Additionally, the proposed bill contains language saying that an insurer must alert the insured of their right to patronize the repair facility of his or her choice. The bill also provides scripts of this announcement with the stipulation that the insurer must use a statement "substantially similar" to the following:

"Oregon law prohibits us from requiring you to get repairs to your vehicle at a particular motor vehicle repair shop. You have the right to select the motor vehicle repair shop of your choice."

Should an insured choose a repair facility not recommended by the insurer, the bill goes on to state that the cost of the restoring to the vehicle to a pre-loss condition may not be limited. "The insurer may not limit the cost of repairs necessary to return the motor vehicle to a pre-loss condition relative to safety, function and appearance other than as stated in the policy or as otherwise allowed by law."

Lastly, the bill stipulates that if an insured does choose an insurer-recommended facility, the insurer must issue a form stating that the insured has chosen to use the recommended facility, and the insured's vehicle will "receive repairs returning it to a pre-loss condition relative to safety, function and appearance at no additional cost to you other than as stated in the insurance policy or as otherwise allowed by law." This form must be provided to the insured in either electronic or physical form within three business days.

CLICK HERE to read the text of the bill in its entirety.