Why Oregon Consumers Can't Sue Insurance Companies for Bad Conduct
Oregon protects consumers who are mistreated by businesses with a state law called the Unlawful Trade Practices Act. Consumers who are tricked, abused, defrauded or otherwise treated unfairly have a number of remedies under this law. There is only one type of business that is exempt from this consumer protection law: Insurance companies have been exempt since the law was passed in 1971. Banks were exempt until 2010, when bank misconduct leading to the recent recession led to the removal of their exemption from Oregon law.
There is now a battle on in the Oregon Legislature to remove the exemption for insurance companies and allow consumers the ability to sue insurance companies directly for not paying claims promptly, for wrongfully denying coverage losses, or for engaging in other fraudulent conduct.
Our office recently represented a retired businessmen and the widow of a former business partner in a claim against a major fire insurance company. A rental building the clients had owned for over 20 years burned as a result of a careless roofer. The clients had purchased insurance to cover lost business income in case of just such an event. Their own insurance company denied payment of their lost rental income over the six months it took to repair the building because at the time of the fire, the building was not occupied by a tenant. Even though the building had been almost continuously been rented for over 20 years and a new tenant was waiting for the roofing job to be completed, the insurance company said they were “not in business” at the time of the fire. It took years of litigation leading up to a settlement shortly before a trial when the insurance company was about to face a local jury. Had insurance companies not been exempt from Oregon’s Unlawful Trade Practices Act, the clients may have had a much swifter and more effective remedy, but the exemption allowed the insurance company to deny the claim, delay the claim, and play a waiting game until the eleventh hour, running up expenses for our clients.
Another client has had his private disability income payments stopped by an insurance company, after the insurance company sent his medical records to a doctor in Florida, who suggested he was no longer disabled. This opinion was contrary to our client’s treating doctors in Oregon and even the opinion of the Social Security Administration, who hired an independent doctor to determine the client’s disability.
These are just a couple examples of how Oregonians can have their claims denied, delayed and then only settled after incurring great expense because insurance companies are immune from the protection of Oregon’s Unlawful Trade Practices Act.
House Bill 3160, pending in the Oregon Legislature, would rectify this injustice, but the insurance industry has opened their checkbooks to dozens and dozens of lobbyists who are trying to kill this consumer-friendly legislation. Check out the whole story at: