ORS 742.504: Oregon UM/UIM Claims, Arbitration, and Deadlines

ORS 742.504 is the Oregon statute that dictates what every auto insurance policy sold in the state must include for uninsured motorist (UM) and underinsured motorist (UIM) coverage. It sets the minimum limits at $25,000 per person and $50,000 per accident, defines who counts as an insured, lays out how claims must be filed and investigated, and controls how disputes get resolved.¹ Because your own insurer pays the claim, the statute matters: it is the rulebook you and the adjuster are both working from.

Who the Statute Protects

“Insured” is defined broadly. It starts with the named policyholder and extends to family members in the same household. It also covers anyone occupying the insured vehicle with the policyholder’s permission at the time of the accident.¹ If a friend borrows your car and gets hit by an uninsured driver, your UM coverage follows them.

“Bodily injury” means bodily injury, sickness, or disease, including death. That language reaches injuries that develop after the crash, not only what you report at the scene.¹

When the Coverage Applies

A vehicle is uninsured when the owner or operator has no collectible bodily injury liability insurance meeting Oregon’s minimum limits at the time of the accident. The definition also covers the at-fault driver whose insurer denies the claim, goes bankrupt, or becomes insolvent. If neither you nor your insurer can locate valid insurance for the other driver within 90 days of the accident, Oregon law creates a rebuttable presumption that the vehicle was uninsured.¹

An underinsured vehicle is one where the at-fault driver has liability insurance, but the limits are too low to cover your damages. UIM coverage kicks in only after the at-fault driver’s liability limits are exhausted or offered. Specifically, one of these must happen first: the full liability limits are paid out, or those limits are offered and your insurer either consents to the settlement or refuses consent under subsection (4)(a).¹ If your insurer refuses consent to a less-than-limits settlement, you must preserve its subrogation rights against the at-fault driver, or your UIM payout can be reduced. Always notify your UM/UIM carrier before accepting any settlement from the at-fault driver’s insurer.

Hit-and-Run vs. Phantom Vehicle Claims

Oregon draws a sharp line between the two, and confusing them can sink a claim.

A hit-and-run vehicle actually makes physical contact with you or the vehicle you occupy, but the driver or owner can’t be identified. You must report the accident within 72 hours to law enforcement, the Oregon Department of Transportation, or the equivalent agency in the state where the crash happened. Within 30 days of that report, you must file a sworn statement with your insurer explaining the claim and confirming the other driver’s identity is unknown. The insurer can also demand to inspect your vehicle.¹

A phantom vehicle causes an accident without ever touching you or your car — think of a driver who swerves into your lane, forcing you off the road, then disappears. The 72-hour reporting and 30-day sworn statement rules still apply, but you also need competent evidence corroborating the accident from a source other than yourself or anyone else making a UM claim from the same crash.¹ A witness statement, dashcam footage, or a responding officer’s observations can satisfy that requirement. Without independent corroboration, the claim fails.

Your Coverage Limits and the Right to Reduce Them

Oregon’s minimum UM/UIM limits mirror the state’s minimum liability requirements: $25,000 per person and $50,000 per accident.² Under ORS 742.502, your insurer must set your UM/UIM limits equal to your bodily injury liability limits unless you elect lower limits in writing. If you carry $100,000/$300,000 in liability coverage, your UM/UIM coverage defaults to the same amount.³

You can reduce UM/UIM limits, but not below the $25,000/$50,000 floor. The election has to be a signed written statement completed within 60 days. It must acknowledge you were offered matching limits, include a summary of what UM and UIM coverage provides, and show the price difference between the full limits and the reduced limits you chose. Once signed, the election stays in force until you rescind it in writing or change your liability limits. Adding or removing a vehicle doesn’t reset it.³

Many drivers signed a reduction form years ago and forgot. If you’re carrying $250,000 in liability but only $25,000 in UM/UIM, that gap could cost you six figures in a serious crash with an uninsured driver. Pull your declarations page and check.

Filing the Claim

A UM/UIM claim rests on three things: that the accident happened during your coverage period, that the other vehicle was uninsured or underinsured, and that you suffered compensable bodily injuries.

Start with the police report. Oregon requires a DMV accident report when property damage to any vehicle exceeds $2,500, when any vehicle is towed from the scene with over $2,500 in damage, or when anyone is injured.⁴ The report usually confirms the other driver’s insurance status, and you can verify coverage through the Oregon DMV’s insurance verification system.⁵

Collect every medical record and bill tied to your injuries, including imaging, specialist referrals, and rehab notes. Under ORS 742.504(5)(a), you must provide written proof of your claim covering the nature and extent of your injuries, your treatment, and other details relevant to what you’re owed. Your insurer has 15 days to furnish claim forms after receiving notice; if it doesn’t, you can submit proof of loss without them.¹

Send the package by certified mail with return receipt, or through the insurer’s digital portal. The date the insurer receives it starts several statutory clocks.

What Your Insurer Must Do

Once your insurer receives notice of the claim, it has 30 days to acknowledge the claim or pay it, with the acknowledgment dated in the file. It must reply to other claim communications within 30 days when a response is reasonably expected, and it must promptly provide necessary forms and instructions when you first report the loss.⁶

Beyond those timing rules, ORS 746.230 prohibits a range of unfair claims practices: misrepresenting policy provisions, failing to conduct a reasonable investigation, refusing to pay without investigating, or delaying settlement on one coverage to influence negotiations on another. Compelling you to sue by offering substantially less than what you’re owed is specifically listed.⁷ Violations can be reported to the Oregon Department of Consumer and Business Services.

Exams You Have to Sit For

Under ORS 742.504(5), your insurer can require you to submit to examinations under oath as often as reasonably necessary. You must answer questions, subscribe to the transcript, and cooperate. Refusing can jeopardize your claim.

The insurer can also require physical examinations by physicians, naturopathic physicians, physician assistants, or nurse practitioners of its choosing, at its expense, and you must sign medical authorizations so it can obtain your records.¹ The exam physician works for the insurer. Bring notes about your symptoms, be honest and thorough, and don’t minimize or exaggerate. Those reports carry significant weight.

Arbitration or Lawsuit, and the Two-Year Clock

When you and your insurer can’t agree on whether you’re entitled to damages or how much, ORS 742.504(10) allows arbitration — but only if both sides agree to it at the time of the dispute. It is not automatic. Either side can decline.¹

If both sides elect arbitration, ORS 742.505 governs the process. Unless you agree otherwise, the dispute goes to a three-person panel: you pick one arbitrator, the insurer picks one, and those two select the third.⁸ Your arbitration costs are capped at $100 and the insurer bears the rest, though that cap does not include your attorney fees or the cost of producing evidence, witnesses, or transcripts. Once both sides elect arbitration, the award binds, and a court can enter judgment on it. You choose the location: your home county, the county where the accident happened, or wherever you and the insurer agree.¹

If arbitration doesn’t happen, you can sue your insurer in circuit court. The insurer then defends the case as though it were the at-fault driver, contesting liability and damages.

The statute of limitations is built directly into ORS 742.504(12), and it is stricter than most people realize. Within two years of the accident, you must do one of the following:

Reach a settlement with the insurer
Formally begin arbitration proceedings
File a lawsuit against the insurer
Sue the uninsured motorist directly, which then gives you two more years from the settlement date or final judgment against that motorist to institute arbitration or sue the insurer

Miss the window and your right to recover under the policy is extinguished.¹ The general two-year personal injury statute under ORS 12.110 also applies to the underlying tort claim against the at-fault driver.⁹ Calendar these deadlines the day of the accident, not when you finish treatment.

Attorney Fees as Leverage

Under ORS 742.061, if your insurer doesn’t settle within six months of receiving your proof of loss and you file suit, the court will award you reasonable attorney fees as part of your costs, provided your recovery exceeds any settlement offer the insurer made.¹⁰

Insurers can avoid that exposure through a safe harbor. Within six months of your proof of loss, the insurer must do three things in writing: accept coverage, agree that the only remaining issues are the liability of the uninsured or underinsured motorist and the amount of your damages, and consent to binding arbitration.¹⁰ If the insurer takes the safe harbor and then raises additional issues in its pleadings — contractual compliance defenses, offsets — it loses that protection. Courts look at the insurer’s actual litigation conduct.

This provision shapes the entire negotiation. If your insurer is slow-walking the claim past the six-month mark without a settlement or a safe harbor letter, the leverage shifts to you.

A Trap Worth Knowing

A no-fault judgment against the at-fault driver obtained in a separate lawsuit is not conclusive between you and your insurer on liability or damages. ORS 742.504(1)(b) says so directly.¹ A default judgment against an uninsured driver doesn’t bind your insurer to that number. You still have to prove liability and damages, through arbitration or in court.

1
Oregon State Legislature. Oregon Code 742.504 – Required Provisions of Uninsured Motorist Coverage
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Oregon State Legislature. Oregon Code 806.070 – Minimum Payment Schedule
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Oregon State Legislature. Oregon Code 742.502 – Uninsured Motorist Coverage
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Oregon Department of Transportation. Collision Reporting and Responsibilities
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Oregon Department of Transportation. Information for Insurance Companies
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Oregon Secretary of State. Oregon Administrative Rule 836-080-0225 – Required Claim Communication Practices
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Oregon State Legislature. Oregon Revised Statutes Chapter 746 – Trade Practices and Fraudulent Claims
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Oregon State Legislature. Oregon Code 742.505 – Arbitration Procedures Under ORS 742.504
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Oregon State Legislature. Oregon Revised Statutes Chapter 12 – Limitations of Actions and Suits
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Oregon State Legislature. Oregon Code 742.061 – Recovery of Attorney Fees in Action on Policy or Contractors Bond