Drivers License and Insurance Information:
Insurance Requirements

Oregon law requires every person who drives in this state to carry automobile liability insurance in case of accident. This is true whether you paid cash for your car or have a car loan. Liability insurance only covers damage you cause to another vehicle, its occupants, or a bicyclist or pedestrian, if the accident was your fault. Liability insurance will not pay for damage to your own car whether or not the accident was your fault.

Every liability insurance policy in Oregon includes Personal Injury Protection coverage (PIP). PIP will pay for medical expenses up to $10,000 during the first year after you or your passenger are injured in a car accident, even if the accident was your fault.

Driving Uninsured
You will get a ticket if you are caught driving without liability insurance. The penalty is a fine of up to $300, even if the bail on the ticket is less. Until you get a ticket for driving uninsured the Motor Vehicles Division (DMV) will take your word that you have valid liability insurance. But once you are convicted of driving without insurance the DMV will suspend your privilege to drive in Oregon any time during the following three years that you fail to provide constant proof you have valid insurance, whether or not you have ever had an Oregon driver license or hold a current, valid out-of-state license or international license. Proof of insurance after conviction for driving uninsured is usually done in the form of an SR-22 insurance filing. Unlike a standard insurance policy, an SR-22 is a special high risk, high cost insurance policy that requires the insurer to notify DMV any time you allow the policy to lapse. The DMV will suspend your license when it gets notice your SR-22 has lapsed.

To make matters worse, once you are suspended your insurance rates will go up and you will have to pay to reinstate your driving privileges when your suspension is over.

Here are some common ways people get in trouble for driving uninsured:

My friend told me I would be covered by his insurance when I borrrowed his car.
Don't borrow a friend's car relying on his or her assurance that you will be covered by the owner's insurance. Your friend might not intentionally mislead you but that won't help if you have an unexpected accident.

Liability insurance does not always cover anyone who drives with the owner's permission. If the friend's insurance is through his parent's policy, for example, chances are that coverage will never extend to you in the event of an accident because you are not a named insured driver and not a family member. If the vehicle is a rental car any coverage the renter might have purchased will not cover you if you are not an authorized driver named on the rental contract at the time the vehicle was rented. These are problems most people discover only after the accident.

Worse yet, you could be cited for driving uninsured and get your driver license suspended, even if the accident wasn't your fault. If the DMV learns you were involved in an accident and had no insurance at the time, it will suspend your driving privileges for one year, even if the accident was not your fault.

If your friend's insurance won't pay and the crash was your fault, you will be personally liable for injury you caused to the other car and its occupants. Your friend also will have every right to expect you to pay for the damage you caused to his car. If the crash was not your fault, and you have the misfortune of being hit by an uninsured driver like yourself, you may be on your own financially. Your friend will have lost his car or some of its value and you may have to pay your own medical expenses. If your passengers are also injured they will have the same problem. Of course, you can always sue the other uninsured driver who was at fault, but winning a lawsuit does not guarantee you will ever collect the money you are awarded by the court.

Your best bet is to not drive other people's cars.
I thought my insurance would cover me when driving my friend's car. Now my friend is mad because a claim was made against HIS insurance.

The general rule is that insurance follows the car. This means that if your friend's insurance covers the accident, your own insurance will be considered secondary to the owner's. You will not be able to choose which policy the claim will be paid from. Your friend could wind up paying for your negligence for years through increased premiums.

The friend who borrowed my car promised me he had valid insurance.
Don't let other people drive your car. Your friend just might have valid insurance but, again, insurance generally follows the car. This means that your own insurance will be considered the primary coverage. You will not be able to choose which policy the claim will be paid from. You could wind up paying for your friend's negligence for years through increased premiums.

Your best bet is to not allow others to drive your car.

This information is not intended to provide legal advice. Any incidental fee-paying University of Oregon student who has questions about automobile insurance may call ASUO Legal Services at 346-4273 to arrange an appointment.

Information disseminated in this website does not constitute legal advice and does not create an attorney/client relationship. This page is for information purposes only. For legal advice, contact an attorney licensed in your state.