PIP Covers All Drivers Who Drive With Car Owner’s Permission

The State of Oregon Court of Appeals recently heard such a case, where Geico Insurance Company was the defendant in a case taken by Brandon Sheptow (Sheptow v. Geico Gen. Ins. Co., 246 OR App 18 (2011)). This case sets a precedent that anyone driving a car (with the owner’s permission) will be covered under the insured owner’s Person Injury Protection coverage.

The undisputed main facts of the case are:

  • Sheptow was injured in an accident whilst driving his mother’s car.
  • Sheptow had permission to drive the car.
  • The other driver was the negligent party.
  • Sheptow was not living in his mother’s house at the time of the accident.
  • Sheptow was not named on his mother’s policy at the time of the accident.
  • Sheptow sought benefits under the policy for medical expenses and lost wages.
  • The original trial found that Sheptow was entitled to cover and awarded him $24,224.

Geico denied the claim in its entirety, and launched an appeal based on the fact that Sheptow was neither named on his mother’s policy, nor was he living at his mother’s residence when the accident occurred.  The insurance company argued that ORS 742.520 says every motor insurance policy issued in Oregon must provide cover for the insured person and:

  • Members of the insured’s family living in the same household
  • Children not related to the insured by blood, marriage or adoption, who are living in the insured’s household and being reared as the insured’s own
  • Passengers occupying the insured motor vehicle
  • Pedestrians struck by the insured vehicle

Geico Insurance said that Sheptow was not entitled to personal injury protection (PIP) because even though he had his mother’s permission to drive the car, he was not living at her home at the time of the accident.

Sheptow and his Portland personal injury lawyer argued, however, that another Oregon statute–ORS 806.060 (1)(b)—provided him with cover. This law states that all motor vehicle policies issued in this state must:

  • Insure the named insured and all other persons insured under the terms of the policy against loss…arising out of the ownership, operation, use or maintenance of the vehicle by persons insured under the policy
  • The policy must include in its cover all persons who, with the consent of the named insured, use the motor vehicle insured under the policy, except for any person specifically included from coverage under ORS 742.450.

Sheptow argued that as he was given permission to use his mother’s car, and that because he wasn’t excluded under the provisions of ORS 742.450, he was entitled to cover under the Geico policy. His Portland personal injury lawyer argued that the fact Sheptow was not a resident of his mother’s house at the time of the accident was irrelevant in light of ORS 806.060.

Geico also argued that in an earlier case, Mid-Century Insurance Co. vs. Utah Home Fire Insurance Co., the court ordered that a permissive user was not entitled to PIP cover, on the basis that they were not resident at the home of the insured.

The court agreed with Sheptow and found that Geico’s argument that Sheptow was not specifically insured on the policy and wasn’t living at home at the time of the accident were insufficient reasons to deny him PIP cover under the policy. They pointed out that passengers in the car or pedestrians who were hit by the insured car would be covered, even though they are not named under the policy. As to the Mid-Century case, the court said the judgment pre-dated the extended provisions of ORS 808.080 (1)(b), which provides cover for permissive drivers unless they are specifically excluded by separate statutes, which Sheptow was not.

Geico were not happy with the court’s ruling. They said that the judgment could create a situation where one household, totally separate from another household, would have cover for the same vehicle, simply if the person from the insured’s family home gave permission to someone to drive the insured vehicle, whether related or not. A Portland personal injury attorney refuted this argument, stating that even under the 1991 legislation, a person could drive the insured vehicle only with the consent of the insured person who is named under the insurance policy. The named person is the only person who can give permission for the vehicle to be driven.

Insurance companies go to great lengths to avoid paying out settlements, and when they feel threatened by laws that protect motorists and their families, they vigorously defend themselves against the possibility of having to pay injury claims. They deny claims and defend even more stringently when a claimant has no legal representation. In Oregon, if you have been injured in an accident and the insurance company seems unwilling to pay a fair settlement, the best way you can protect yourself is by retaining the services of an experienced and respected Portland personal injury attorney. They deal with the insurance companies every day and are familiar with the techniques used to pay out settlements as small as possible, as late as possible. If you don’t want to be the victim of an insurance company, as well as a negligent driver, you’d do well to have a good personal injury lawyer on your side.