Oregon Case Update: First-party UIM Claims at Trial: When Can the Exclusion of Policy Limits Lead to Reversal?

When a first-party underinsured motorist (UIM) case goes to trial, it is often advantageous to move to exclude mention of insurance policies and policy limits.  A recent Court of Appeals opinion states that legal issues to accomplish this goal may be complex.

This Oregon law update is a follow-up to a previous Oregon law update that was distributed on January 14, 2016.  The current update clarifies the position that Safeco took at trial with respect to whether Thoens was underinsured and how Safeco arrived at that position.

Claims Pointer: In the following case, an insurer denied UIM coverage and the insured sued for benefits.  At trial, the court granted the insurer’s motions to exclude evidence of the responsible driver’s liability policy limits and the plaintiff’s UIM policy limits.  The court proposed to instruct the jury that the insurer stipulated that the responsible driver was underinsured, but the insurer objected on the grounds that this could not be determined until the jury decided the amount of damages the plaintiff was entitled to recover, and the jury returned a verdict for the insurer on the issue.  However, the Court of Appeals reversed.  The Court of Appeals stated that whether a driver is underinsured is based not on the amount of damages but on the amount of the liability policy limits and the UIM policy limits.  As a result of the insurance information being excluded, the jury was asked to determine whether the responsible driver was underinsured without sufficient evidence to do so.  The takeaway from this case is twofold: first, whether a driver is underinsured is determined from the liability policy limits as compared to the UIM policy limits; and second, where policy limits are excluded, either the jury must have sufficient evidence to determine whether a driver is underinsured, or the parties can stipulate that the liability limits are less than the UIM limits.

Thoens v. Safeco Insurance Co. of Oregon, 272 Or App 512...

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