Oregon Case Update: What Qualifies as an Excess Policy in the State of Oregon?

Oregon Case Update: What Qualifies as an Excess Policy in the State of Oregon?

From the Desk of Ryan McLellan: Oregon law imposes certain minimal financial responsibility laws on providers of motor vehicle liability insurance. However, there are several types of insurance that are statutorily exempted from those minimum requirements. One exempted type of policy is an excess liability policy. How does an Oregon court determine whether a policy is properly classified as an excess policy? Read on to find out.

Claims Pointer: In this dispute between insurers, the Oregon Court of Appeals was required to identify the characteristics that make a liability policy an excess policy under Oregon law. In its opinion, the court of appeals rejects a test established by an Oregon federal district court and determines instead that it must look to the text and intention of the contracting parties to determine whether a liability policy is an excess policy. After establishing the correct test, the court determined that the defendant in this matter had indeed issued an excess liability policy and was accordingly not subject to Oregon’s minimum financial responsibility laws.

Oregon Mutual Ins. Co. v. Certain Underwriters, 295 Or App 790 (Jan. 30, 2019).

This case arose from of a dispute between two insurers who provided coverage for the same injury. RSVP-SCP of Clackamas County (RSVP) is an Oregon non-profit that arranges for volunteers to transport individuals to medical appointments. Schabert, a volunteer registered with RSVP, was tasked to pick up and transport Saint to a medical appointment. When Saint was entering Schabert’s vehicle, she slipped, fell, and suffered personal injuries. Saint settled with Schabert for $180,000. The first $100,000 of the settlement was paid by Oregon Mutual, Schabert’s primary automobile insurance policy. Lloyd’s of London, which provided a “volunteer excess auto liability” insurance policy for RSVP, paid the remaining $80,000 of the...

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