*1 31 reversed; Argued January Appeals and submitted decision of the Court of judgment April of the circuit court affirmed PIERCE, Linda Diane Respondent Review, on COMPANY, ALLSTATE INSURANCE Petitioner on Review.
(CC S39392) 90-1515-L-1; A67513; CA SC P2d *2 Bachman, D. Craig of Lane Powell Spears Lubersky, Port- land, argued cause for petitioner on review. With him on the petition was Thomas W. Sondag. L.
Kelly Andersen, of Richardson & Andersen, P.C., Cen- tral Point, the cause argued on review respondent filed a response.
GRABER, J. Hoomissen, J., Van dissented and filed an in which opinion Fadeley Unis, JJ., joined. J.,
Fadeley, filed a separate dissenting opinion.
GRABER, J.
ORS 742.502 for the issuance of uninsured provides liability underinsured motorist coverage: “(1) Every liability insuring motor vehicle against by any resulting loss suffered natural from person by law imposed bodily injury arising or death out ofthe maintenance ownership, or use of a motor vehicle shall uninsured motorist therein or by indorse- ment thereon when such is either:
“(a) delivery state; Issued for in this “(b) Issued or doing delivered an insurer business in respect this state with motor principally vehicle then principally garaged used or in this state.
“(2) issuing The insurer such policy shall offer one or options more amounts of uninsured larger than the to meet the
prescribed requirements of ORS 806.070[, infra,1 set out note to the up provided limits bodily injury liability under the for motor vehicle Offers of coveragelarger insurance. than the amounts required by ORS 806.070 shall include underin- * * surance equal *. Underinsurance benefits shall be
to uninsured motorist benefits less *3 amount recovered from liability other automobile insurance policies.”
The issue in this case is whether ORS
defendant
insurance
to offer
required
company
plaintiff
* * *
of uninsured motorist
to the limits
“options
up
under
for motor vehicle
provided
policy
bodily injury
time that
added
to
liability
every
plaintiff
insurance”
vehicles
vehicles,
her
deleted
liability
policy,
automobile
named in
with other vehicles.
policy
vehicles
replaced
742.502(2) did not
such
court held that ORS
require
trial
for defendant. Plain-
summary judgment
offers and granted
Allstate
reversed. Pierce v.
Appeals
tiff
Court of
appealed;
(1992).
530,
The material facts from defen- liability chased an automobile Datsun and a 1985 covered a 1981 dant in 1985. The policy 1985, in defendant obtained Ford. When plaintiff cov- liability offered plaintiff “optional” $100,000, in the amount bodily an amount erage up in the That offer policy. injury liability coverage provided of ORS 742.502. Plaintiff did with the complied requirements result, the offer. As a issued to her accept not in the amount included uninsured motorist $25,000 the minimum amount ORS person, required by per 806.070(2)(a).1 742.502(1), 806.060(1), and deleted the Ford from the May plaintiff In In she added a 1965 Chevrolet. September policy. deleted the Datsun and added a 1986 1987, she January defendant, Isuzu. issued by plaintiffs policy permitted As additions, deletions, and as modifications replacements those did not offer unin- existing optional to the Defendant policy.2 on of those occasions. plaintiff any sured motorist porch, In March while on her front standing a car driven underin- severely injured by The underinsured motorist’s insurer paid sured motorist. 806.060(1) provides: ORS comply responsibility person the financial “A who is with respond damages, requirements required in amounts of this state must be able to section, arising on account of accidents out ofthe under this * * ownership, operation, maintenance or use of motor vehicles *. “(1) responsibility requirements, person financial must be To meet the respond damages under in amounts not less than those established able to * * * ORS 806.070.” 806.070(2)(a) provides: payments schedule of is as follows:
“The “(a) any $25,000 bodily injury person one because of to or death one accident!.]” - Insurance,” Liability policy con “Part I Automobile the insurance Under followingexplanation of what constituted an insured vehicle: tained the
“Insured Autos
“(1)
private
Any
page and
four wheel
auto described on the declarations
utility
you replace
passenger
it
auto or
auto
with.
“(2)
utility
you
private passenger auto or
auto
An additional four wheel
ownership during
premium period.
if
acquire
This auto willbe covered we
must,
utility
you
private passenger
You
autos or
autos
own.
insure all other
however, notify
days
acquiring
pay
auto and
additional
*4
us within 60
(Boldemphasis
original.)
premium.”
-
Coverage,”
policy
part:
stated in
“Part III Uninsured Motorists
Under
“An
auto
a motor vehicle:
insured
“(1)
replace
page,
you
and the motor vehicle
it
described on the declarations
with.
damages.
less than her total
$50,000, which was
against
action
declaratory judgment
a
brought
Plaintiff
under ORS
rights
her
defendant,
to determine
seeking
that ORS
She asserts
the insurance policy.
742.502
742.502(2)
optional
have offered her
defendant
amount of
her policy,
limit under
$100,000,
injury liability
the bodily
or added
from, replaced,
deleted automobiles
each time she
had not
that,
because defendant
to her policy
automobiles
$100,000.
in the amount of
so,
entitled to
done
she is
deletion,
whether
before us is
The question
a vehicle is an event requiring
or addition of
replacement,
under ORS
uninsured motorist coverage
offer of optional
742.502(2).
statute, our
is to discern
task
interpreting
ex rel Juv.
State
174.020;
ORS
the intent of the
legislature.
(1991). We
Ashley,
169, 174,
We then reach question vehicle, or the replacement the deletion of vehicle to policy, under the same vehicle with another of one insured meaning of a within the “issuance” constitutes “(2) during premium period. additional acquire ownership This you private passenger insures all other will be covered if Allstate motor vehicle however, days must, notify you Allstate within 60 You motor vehicles own. (Bold premium.” pay acquire additional you motor vehicle and after emphasis original.) *5 742.502(2).3 Code demon- of the Insurance Several sections that the answer is “no.” strate does not contain an explicit
The Insurance Code defined, however, “Policy” definition of “issuance.” ORS 731.122:
“ agree- or written ‘Policy’means the written contract called, insurance, whatever name effecting by ment for or clauses, riders, papers indorsements and and includes all added.) (Emphasis which are a thereof and annuities.” part include “policy” may that a implies single That definition indorsements, which often are incorpo- riders and multiple also ORS 742.458 policy. rated after the issuance of See (with vehicle insurance liability policy, to motor respect therefor, if and any, the written application policy, “[t]he * * * constitute the entire rider or indorsement shall any contract”). that a suggest “policy” generally Other statutes once, in to an response application by “issued” only the insured’s state- 742.013, insured. Under ORS prospective are “deemed for an insurance policy ments an application omissions, con- Misrepresentations, to be representations.” recovery fact, prevent and incorrect statements cealments of if are “contained in a written only they “the policy” under applica- and a of the copy the insurance policy, application for when or attached to the insurance upon tion is indorsed Ibid, added). ORS 742.046 requires (emphasis issued.” delivered to the insured or to “be mailed or every policy of time entitled thereto within a reasonable period person where a condition required by its issuance except after added.) met the insured.” (Emphasis insurer has not been (two may jointly 742.026 or more insurers also ORS See and combination policies). certain underwriters’ “issue” makes clear that The scheme also statutory an additional liability policy renewal of a motor vehicle new policy. the issuance of a does not constitute period addition, liability dele parties’ insurance treated automobile policy, ongoing tion, replacement to one of insured vehicles as amendments is, however, question argue before us one not otherwise. The does construction, policy. statutory not of construction of the insurance one 742.560(2), which relates cancellation and nonrenewal of policies, provides part: automobile “ ‘Renewal’ ‘to renew’ means to continue upon additional period expiration of the current added.) policy period of a policy.” (Emphasis policy” Unless “a is canceled or nonrenewed the stat- utorily required method, it continues. ORS 742.560 to generally, 742.570. More and to similar effect, ORS 742.051 provides:
“Any policy terminating by its terms at a specified expiration renewable, date not otherwise may be renewed or at insurer, extended if option *6 renewed upon currently or extended policy authorized form at required therefor, rate then specific for a period periods by by additional certificate or indorsement of the policy, without requiring issuance a newpolicy.” added.) (Emphasis policy may That is, insurance be renewed or extended requiring policy.” “without the issuance of a new Finally, directly plaintiffs spe- and most relevant to 742.504(2)(b) here, cificclaim ORS defines the term “insured vehicle” in the context ofuninsured and underinsured motor- ist as follows: in [an
“As used liability] policy: * * * “(b) vehicle,’ ‘Insured means: “(A) The policy newly vehicle described or a * * * * * * * ** vehicle, acquired provi- insured under the added.) the policyU” (Emphasis sions of 742.504(2)(b)(A) interpret We the text of ORS to mean that policy, of a addition vehicle to the deletion of a described replacement by vehicle, or the under one vehicle another policy policy the same does in the not constitute issuance of a coverage. context of uninsured and underinsured motorist contemplates may is, added, That be the statute that vehicles replaced ongoing existing, an deleted, or as modifications to policy.
Reading
provisions
the relevant
of the uninsured
together,4
motorist statute
Insurance Code
we conclude
plaintiff added
to
that, when
vehicles
the motor vehicle
defendant,
issued to her
deleted
replaced
vehicles, or
under
vehicles insured
with
required,
vehicles,
under
other
defendant was not
ORS
742.502(2),
plaintiff “options
to
offer
coverage larger
provided.
than”
minimum amounts
742.502(2) requires
ORS
that an
made
Rather,
offer be
when
initially
an insurer
issues
to an insured.5
holding
Although
agree
we do not
with the
below in
Oregon
Appeals’
present
agree
case,
we
with the
Court
743.789)
(formerly
742.502
statement
intended
that ORS
Oregon
provide
“to
drivers an affirmative choice
protection against
more
minimum
whether
obtain
than
statutory amendment,
[and,
later
underin
uninsured
sured]
App
Co.,
White
Insurance
68 Or
motorists.”
Safeco
(holding
15, 680
an insurer
an
P2d 700
has
affirma
duty
expressly
tive
ity optional
to communicate
to insureds the availabil
coverage),
den 297 Or
additional uninsured
rev
(1984).
agree
Appeals that,
We also
with the Court of
an
has been
aware that the
“once
insured
made
available,
obligated,
aptly
is not
as the trial court
insurer
really
it,
whether the
put
continuously
insured
inquire
meant to refuse. Plaintiff has not asserted
defendant’s
and, having once
adequate
was not
April,
notice
’’
it,
again.
given
was not
notice
defendant
(Footnote omitted.)
App
Ins.
100 Or
v. State Farm Mutual Automobile
Wood
*7
(holding
were
that new offers
not
576, 580,
cases from other jurisdictions of their support positions. Those cases are of limited persuasive value, they because involve statutes, facts, different different hold- inapposite or a ings, combination of those things. note, however, We many cases from other jurisdictions support our conclusion.6
We also note that
the dissent cites 13A Appleman,
(1976 ed).
Insurance Law and
§
Practice
“A renewal contract has been
by many
stated
jurisdic-
new,
tions to be a
and a separate
contract,
and distinct
unless
the intention
the parties is shown clearly that the original
agreements
renewal
shall constitute one continuous
(footnote
added).
contract.” Id. at
omitted;
450-51
emphasis
6 See,
(La
1986) (an
e.g.,
Guillory,
Mouton v.
App
494 So 2d 1374
insurer who
policy
issues a
present
renewal or substitute
need
option
not
the insured with the
rejecting
(La
coverage);
Young,
motorist
App
Moore v.
490 So 2d 519
1986) (increase
liability coverage
in amount
policy,”
awas “renewal
to which limit
coverage,
of uninsured
years earlier,
motorist
selected seven
apply);
continued to
(1986)
Co.,
Hoskins v.
State Farm Mut. Auto. Ins.
26 Ohio St 3d
defendant Appeals The is reversed. The of the Court of decision judgment court is affirmed. of the circuit dissenting. J., HOOMISSEN,
VAN majority in this follows: frames issue case as The 742.502(2) “[Wjhether insurance required defendant ORS of uninsured motorist plaintiff ‘options to offer company * * * under the to the limits coverage up provided every time bodily injury liability insurance’ motor vehicle automobile insur- added vehicles to her plaintiff vehicles, replaced vehicles named policy, ance deleted Or at 33. with other vehicles.” 316 reject I that formulation.
I frame the issue as follows: would case, in this did ORS presented On the facts undisputed 742.502(2) (Allstate) company defendant insurance require coverage plaintiff “options to offer of uninsured motorist ** * for motor up provided to the limits under injury liability after December bodily vehicle insurance” injured in March 1985 but before she was 1988?1 plaintiffs Because contract under entirely different vehicles than those insured materially scope coverage had and the been Accordingly, “yes.” question altered, I answer that I would although Appeals, affirm decision of Court of would my rationale differs.2 agree majority requires 1 I with an insurer offer ORS (UM) optional time an at the automobile when, however, question case, presented is first in this if executed. ever, new offer made. must be challenge plaintiff Allstate does of UM to which not amount 742.502(2). challenges only comply with entitled if Allstate failed to Allstate Appeals’ holding plaintiff that it was to make a new offer of UM Court of
protection when of a there was “new risk.” plaintiff 30, 1985,
Before December was insured Allstate. 30, 1985, On December Allstate sent page billing Declarations statement for insurance on her provided Datsun and Ford. The contract collision and com- prehensive coverage on the Ford, but not on the Datsun. The *9 premiums due were for Datsun, and $63.80 for $152.00 plaintiffs representation Ford, based on to Allstate that the Datsun was to be used for “work” and the Ford was to be “pleasure.” “multiple used for “Good driver” and car” dis- given. premium period began counts were on The contract and January expiration.” 27,1986, “with no fixed date for The following language appeared on that document:
“Uninsured motorist’s equal your limits to bodily injury you limits are offered to at the following prices: Veh 1 Veh 2 $13.00 See $11.10. enclosed update describ- ing this offer and how accept reject it or obtain other available limits.” accept
Plaintiff did not Allstate’s offer. Between December 30, 1985, and 28, March 1988, injured, when by was she continued to be insured pages Allstate. She received billing several Declarations and during period. statements from Allstate that Those docu- following changes plaintiffs ments show coverage: On March 7, 1986, Allstate issued a Declarations page billing changed and statement the contract deleting coverage increasing premium on the Datsun and due on the Ford from $152.00 That $179.80. document part: reads in 6, 1986,
“EFFECTIVE ON FEB YOUR POLICY WAS CHANGED FOR
“THE DELETION OF ONE OR MORE VEHICLES “MULTIPLE CAR DISCOUNT NO LONGER APPLIES
“A CHANGE IN DRIVER OR USE CLASS OF VEHICLE NO. 1 CHANGE,
“PRIOR TO THIS YOUR ACCOUNT PREMIUM WAS $215.80
“YOUR NEW PREMIUM, ACCOUNT ITEMIZED BELOW IS $179.80 A PREMIUM DECREASE
“THIS CHANGE CAUSED TO FOR THE PERIOD FEB JUL OF $33.60 * * *.” 5, 1986, Allstate issued another Declara- May On deleting coverage on page changed tions on Datsun. and adding coverage the Ford and Collision were The added for Datsun. comprehensive was fixed changed from “no premium period contract and All cover- date of “Jul 1986.” subsequent expiration” a fixed age period.3 for 30, 1986, Allstate issued another Declara-
On June Datsun only statement that insured billing tions page premium $186.80. for increased Dec- 15,1986, issued another
On Allstate September the con- changed larations statement billing page The Chevrolet was tract on Chevrolet. by adding coverage comprehensive coverage. not insured for collision and due were Chevrolet premiums $63.00 $157.80 added. “multiple A car” discount was the Datsun. *10 bodily plaintiffs Allstate not offer UM limits to equal did contract, to when the was added the injury limits Chevrolet on the nor did a for such quote specific price coverage Allstate Chevrolet. Decla- Allstate issued another January 16,1987,
On the Datsun and insuring rations and statement billing page $71.20, the and and premiums Chevrolet charging $169.00 on to Allstate based respectively, plaintiffs representation and Datsun the was used for “work” the Chevrolet to be “pleasure.” was to be used for another Decla- January 30,1987, Allstate issued
On the contract changed rations and statement page billing on the on an Isuzu and coverage deleting coverage by adding compre- Datsun. was insured for collision and Only Isuzu for hensive Allstate coverage. charged premium $185.00 Datsun, for Isuzu, premium place $169.00 any may coverage provides time the insured cancel at contract notice, may giving giving written for written notice. On Allstate cancel Allstate days, period during on during first 60 thereafter reason grounds. obligation to renew contract or Allstate is under no contractual certain premium period. issue a new at the end of the plaintiffs representations to based on Allstate that the Chev- for and the rolet to be used “work” Isuzu was to be used “pleasure.” part: That reads in for document 27, 1987,
“EFFECTIVE ON JAN YOUR POLICY WAS CHANGED FOR
“A IN CHANGE DESCRIPTION FOR VEHICLE 1. NO.
“A IN FOR VEHICLE CHANGE LIENHOLDER NO. 1.
“A IN CHANGE DRIVER OR USE OF CLASS VEHICLE NO 1. CHANGE,
“PRIOR THIS YOUR TO ACCOUNT PREMIUM WAS $240.20. PREMIUM,
“YOUR NEW ACCOUNT ITEMIZED BELOW, IS $256.20.” “good “multiple
In addition to the driver” and car” discounts previously given time, from time to that document shows that “economy an car” discount was added. That document also language January contained the 16, 1987, same as docu- emphasizing “change” calling ment, in the contract and payment attention to new balances and notices. Allstate did plaintiffs equal bodily injury not, UM however, offer limits quote specific premium Isuzu, on limits nor did it such on Isuzu. pages billing
Additional Declarations statements were issued Allstate in June December 1987. Neither equal of those documents included offer of UM limits plaintiffs bodily injury liability limits on the Chevrolet or the though Isuzu, even such had never been offered on quoted cars, either ofthose and no had ever been such either on of those cars.
Thus, it undeniable that the contract effect on *11 materially 30, 1985, December was from the con- different changes in tract by effect in March 1988.1 that shown believe the presented enough the in facts this case were material that fairly in in the contract effect March 1988 cannot be described a “renewal” of the Rather, as December 1985 contract. injured. “new” contract was created before was question must of UM is: When an offer the of victims Public favors indemnification be made?4 financially irresponsible negligent, motorists. ORS liberally nature be is remedial in and should carry give legislature’s intent out the to construed order to protection opportunity to the intended an insured an mandatory protection in required the minimum an amount above by (purpose of Insurance Code law. See ORS 731.008 insurance-buying public); protection is 731.016 (insurance construed). liberally Construing the shall be code liberally, change I a material would hold when statute existing contract, such as is made in automobile obligated renew the offer of case, in this the insurer to true UM coverage that must be offered to the statutes mandate purchaser contract, even the though of new automobile insurance rejected coverage. previously has In
the insured such ascertaining legislative only language I intent, look not to object sought accomplished statute, but to be also to wrong legislature and the be remedied. Co., 549, 552, 244 Or
In Farm Fire Bowsher v. State (1966), P2d 606 this court stated: legislative in requir- “The trial court held that intent ing policies provide protection poli- certain insurance injured motor vehicles’ cyholders by operators ‘uninsured injured liberally to the end that persons should be construed limits of protected be to the such by uninsured motorists they have been pro- to the same extent would policies agree.” We if the had carried insurance. tected tortfeasors 106, 111-12, In Ins. Or Peterson v. State Farm (1964), court stated: P2d 651 provision the uninsured motorist “The basic purpose automobile insur- provides protection clear. It seems compensa- risk of against inadequate policyholder ance negligence caused injuries death tion for words, legis- irresponsible motorists. other financially creating compulsory purpose lative in the same injured policyholder place explicit majority not contain an agree the Insurance does 4 1 with the Code “issuance,” history construing legislative no assistance and that is of definition of this statute.
45 had had in if the tortfeasor have been he would position omitted.) (Citations liability insurance.” 742.504(2) to mean ORS majority interprets The motorist underinsured of uninsured that, in the context the issuance of a case do not show the facts coverage, Allstate holds that the majority Accordingly, new contract.5 of uninsured options to reoffer was not required any That lacks holding and 1987. in 1986 little more and is authority citation to or analysis persuasive not the statute is dixit.6 That of interpretation than mere ipse statutory by in the statute or by any language compelled The major- social any policy. is it compelled by context. Nor the pertinent por- of “implications that ity’s suggestion * * * the relevant Code demonstrate of the Insurance tions Moreover, intent,” analysis. lacks persuasive legislative juris- cases from other “many assertion majority’s not conclusion,” sup- 316 Or at is our dictions support involved one of which cited, the cases not by ported a statute. facts similar comparable and/or by cases cited in this case and the The record the same contract insurers keep that some suggest parties long so expiration,” “with fixed date with their insured no continues, adding of insurer-insured as the relationship and/ premiums and changing vehicles deleting or and/or contract, new issue a apparently insurers necessary. as Other of each the expiration at necessary, with amendments as “permitted addi those majority contract the insurance The observes existing policy.” at tions, deletions, 316 Or replacement to the as modification interpreting ORS provisions in relevancy of those contract I fail see the 34. statutory 742.502(2). question majority recognizes, is one of itself As the policy. simply cannot be true construction, It of the insurance one of construction not power when the to insurers delegate to decide legislature intended to triggered. duty is to offer UM support “policy” found in ORS 731.122 majority cites the definition plaintiffs or Chevrolet a contract on never “issued” that the insurer its conclusion 742.458, proposition that a statute, may for the indeed stand and ORS That Isuzu. However,, part ongoing an contract. be considered rider or indorsement should entirely covering an way contract indicate that an insurance in no those statutes a rider or entirely be considered vehicles should period different of time and different majority’s statutes that list of other Nor does the earlier contract. indorsement to an position. Or any support its on the word “issue” have used variations might be considered majority’s analysis puts limitation on what no at 35-36. The never contract rider, where a new lead to situations and could indorsement changes “issued,” party insurers. unless period.
contract Under the majority’s holding, insured a “same contract insurer” would never be person entitled to a reoffer of of uninsured motorist cover- “options what were made in the contract age” regardless changes between the whereas a insured parties, person by a “new contract insurer” would be to an offer entitled of such cover- issued, each time a new if age policy was even no were changes made. It is inconceivable to me that ever legislature intended to make the operation duty created on how insurer chooses to depend its process paperwork. each time an
Generally, *13 renewed, a and separate distinct contract comes into exis- tence unless there clear is evidence that the intended parties 13A, one continuous contract. See Insurance Law Appleman, (rev 1992) (“a § and Practice 7648 ed 1976 renewal Supp new, contract has been stated by many jurisdictions to be a contract, and a and distinct separate unless the intention of is shown and renewal parties clearly original contract”).7 shall constitute one agreement continuous One ask: How much can a contract be may changed before it becomes a new In I case, contract? would hold that a new contract was executed after 1985 and before Allstate’s to offer uninsured motorist plaintiffs injury. duty in 1985 was under but discharged contract, Allstate was relieved not to make another such duty offer when a new contract was issued after 1985.
I
majority
read the
to hold that
insurer
opinion
742.502(2)
need not renew an offer of ORS
coverage regard-
less of the number or
of vehicles added or
from a
type
dropped
contract,
vehicle,
in the
for each
in
changes
changes
canceled,
discounts
or
for each
given
changes
premiums
vehicle,
vehicle,
in use class for each
or
in the
changes
changes
i.e.,
contract
no fixed date of
versus a fixed
period,
expiration
7
(11th
839, 842
Bumpers,
See also Hercules
Inc. v. First State Ins.
863 F2d
1989)
renewed,
(generally,
separate
Cir
each time an insurance
is
existence);
Inc.,
Agcy.
Corp.
76
distinct
comes into
Industro Motive
v. Morris
(1977)
390,
(same);
App
Farm Mutual
Mich
Moreover, ity contrary to the recent relevant of several result jurisdictions. appropriate to examination of
It is make a selective identify holdings, possible states because it is those those that have substantially legisla- adopted identical or similar litigation in almost all tion to ORS because coverage provisions. this area involves standard example, Widiss, and Underinsured For Uninsured (2d 1992), § 32.5 ed states: Motorist Insurance in an cover- change existing “When is made significant — named age person such as the addition of identified as a — a vehicle designated insured or addition several insurer is obligated the courts have held that the states renew offer of underinsured (which applicable legislation amount mandated limits selected for the usually amount of *14 essence, In this means when coverage). respect, in material original changed insured with an oppor- the insurer to the tunity reject to the level of which the statute to of a mandates must be offered the new purchaser though rejected has such cover- previously even the insured omitted.) added; age.” (Emphasis footnote Arms, v. 477 A2d
In State Farm Mut. Auto. Ins. Co. (Del 1984), Supr Supreme of con- the Court Delaware 1060 duty comparable impose addi- a offer its statute strued contract, a whenever new tional explained: renewal, than a is issued. The court other 3902(b)] § C language [Del the of plain conclude that “[W]e insurer] the to offer additional duty a imposed [on than policy, whenever a new other * * * renewal, is issued. The statute clearly contemplates that a renewal is merely automatic continuation of substance, preceding policy, identical and exceptas inform date, and perhaps, premium. Citing Appleman, J. Insurance (1943 1976). Practice, 7648, § Law and at 422 & It is Supp change in legal the basic relationships parties between the renewal, which triggers policy, connotes new rather than a and thus requirement the offer [of statute]. substantive, “These were not minor changes. They were and the passage over months since option of fourteen additional coverage explained was toplaintiff indicates first importance reminding the insured that such protection of added). was available.” 477 A2d at (emphasis 1064-65 noted, As in this case it is undeniable that the insurance 30, 1985, contract effect on December not identical 1988; form and substance with the contract in effect March rather, it was There materially were numerous different. in the major changes substantive contract over a period more than 26 months.
In Fund Pohlman, Fireman’s Ins. Co. v. 485 So 2d (Fla 1986), 418, 420-21 in the context of interpreting statute of UM permitting “stacking” coverage, Supreme Court of Florida stated: Iderstyne, “In States Fire Insurance Co. Van [United v.] (Fla 1977),] 2d the court determined that the So
[347 an existing policy addition of an automobile to of insurance and along premium separate with an additional constituted a on the date of the endorsement. severable contract issued that, case, now hold under the this Similarly, we facts of existing policy an automobile to an addition along severable contract separate constitutes a with an additional added.) (Emphasis insurance.” vehicles were added to case, In several different 1987, and the pre- in 1986 and from the deleted Moreover, the type adjusted accordingly. miums due were were changed. class on some vehicles and use Nat. Ins. Southwestern Beauchamp (Okla Oklahoma Court of 1987), the Supreme P2d stated: separate vehicle insurance for a sought
“[R]espondents August insured under initially those distinct from
49 not a The vehicle was petitioner. issued policy original policy. the insured under for one of those substitute premium an additional the of payment required Petitioner Thus the cover- vehicle. coverage of the additional effectuate and insurance object both an had Jeep the 1974 age of of policy. the original insurance distinct from change a material to constitute clearly appear would This motorist cover- uninsured which policy the original from rejected. age set forth a 3636(F), Legislature has § “In 36 O.S.1981 relieves insurers from which pronouncement narrow motor- rejection of uninsured a written procuring burden of renewed. This existing policy is whenever an ist however, viewed in the context of must be pronouncement, at 36 legislative policy set forth announced explicitly 3636(A) cover- § which is that O.S.1981 full give insurance. To policy with each of age be offered must of provision of section 3636 policy the overall effect to (F) true limited to strictly viewed as must be subsection is, situations existing policies, renewals of where such renewals material effecting a are made without original provisions from the change or departure policy. 3636, we now section policy of
“In furtherance of [v. in Hicks State by the dissent espoused the view adopt P2d 629 468 Company, Mutual Automobile Insurance Farm (Okla Jeep the 1974 1977)], find that the on bypetitioner that issued distinct constituted from § O.S.1981 mandate 36 As such the 1983. August coverage be motorist 3636(A), uninsured Jeep. the 1974 with the conjunction offered motorist failure to offer Petitioner’s failure to obtain attendant and the policy, with the new written 3636(F), resulted § by O.S.1981 rejection required 36 theof coverage part as inclusion of uninsured added.) (Emphasis of law.” by operation Supreme reaching of Oklahoma Court conclusion, its In observed: Florida, Delaware, have Supreme Courts
“[T]he
results
indicated that a new
recently
pre-
coverages
with different
vehicles
where different
miums are added
and/or
Farm Mut.
[citing State
existing policies
v.
Ins. Co.
Arms,
Fireman’s Fund
supra,
Co.v.
Auto. Ins.
Pohlman,
P2d at 675.
supra].”
Mut. Ins.
Ark
Lucky
Equity
(1976),
SW2d 160
Court of Arkansas held that
Supreme
where, after
the insured
rejected
coverage,
had
UM
*16
vehicle,
insurer
issued an endorsement
for a substitute
the
rejection of UM
was not effective
as
the
the
provided under
endorsement. That court explained:
interpretation
“Our
of the uninsured motorist statute
statutory
here
enacting
the
follows
construction rule that where the
general
clause of a statute is
in
language
its
purpose,
proviso subsequently following
should be con-
strictly
exempt
enacting
strued
so as to
no cases from the
terms,
fairly
clause which do not
fall within its
McRea v.
(1885).
Holcomb,
In v. Co., State Farm Mut. Auto. Ins. 297 SC Knight 20, 520, (1988), 374 SE2d 522 cert den 298 SC 203 App (1989), the South Carolina Court of stated: Appeals “The rule is that the renewal general term is in a new and must fora fixed effect
contain all the essentials a valid contract. This is so even though the renewal in parties’ contract continues force contract and no new of insurance expiring terms of exception general is issued. The to these rules is where the renewal in of a in the pursuance provision [sic] is consumated In such instance the renewal is an extension expiring policy. added; of the old contract.” omitted.) citations and footnote (Emphasis Mut. 125 Ill 3d Country App Tucker v. Ins. (1984), in that state’s 956, interpreting 465 NE2d 959 statute, Court of stated: Appeals Illinois corresponding doubt, entirely free from we “Although question is not 143a-l to that insurers offer interpret require section spe- in definite and optional [uninsured motorist] original policies cific terms in renewal so as to policies effective, us, power make what is to the insured’s clear added.) coverage.” (Emphasis of the additional acceptance Russell, 490 Co. Insurance American Universal See also (RI 1985) (statute pertaining unin- to offers of A2d coverage required com- motorist sured coverage upon pany renewal of reoffer uninsured (La App contract); 2d Sowards, So Gaar v. 1990) (increase liability coverage new limits constituted coverage). requiring new UM contract, appellate appears that courts Thus, it a number contrary interpreted to the similar UM statutes have majority’s their interpretation case. The of our statute try majority opinion mention, less does not even much here plaintiffs position distinguish, the authorities favorable response petition plaintiffs to Allstate’s that are cited review.8 foregoing, statutory
From and because of the legislation liberally con- directive that remedial should be *17 protection,9 the intended I strued to conclude presented changes the facts shown the this case resulted triggered duty in the creation of a new contract that a for coverage. Specifically, make of I Allstate to a new offer UM May that a would hold new offer should have been made on comprehensive coverage 1986, when collision and were added coverage. previously only Datsun, had the which September 15, A new offer should have been made on replacement added, when the Chevrolet was as it was not a replaced coverage vehicle, but a one-car with a contract two- coverage type car contract. The first those added a of events of resulting previously purchased, had not been premium scope coverage. an increased and a different of entirely type of those added an new vehicle with a of second (liability only) the on different from the Annot, Statutory Governing Rejection See Construction Provision or of 1992). (1974) Coverage, (Supp ALR3d 216 Waiver Uninsured Motorist States, Although variety there are a of uninsured motorist statutes in the United trends, legislative many statutory provisions there are clear and in different Widiss, essentially and states are Insurance, identical. Uninsured Underinsured Motorist (2d 1992) § ed 2.1. 9 Although the number of and unidentified hit-and- uninsured/underinsured declining statutory requirements run the motorists is due to for automobile insur ance, presented by irresponsible significant hazard because such motorists because, group, they prone. their numbers as are more accident again resulting pre- vehicle,
other insured in an increased scope coverage. mium and a different adopt change” conclusion, In I would a “material test, i.e., an insurer must make a new UM offer whenever any change” existing there is “material in an automobile insurance contract.
My presents any result no burden for insurer. A new may easily programmed any offer of UM be into computer appear page insurer’s on the Declarations billing here, whenever, statement as of an terms insur- materially changed. ance insured Moreover, contract are if the accepts coverage, the offer for increased UM premium easily may adjusted accordingly. be (including Because its risk fixed reflect its profit), nothing. Why the insurer loses this court would want narrowly protect to construe a remedial statute, intended to by financially irrespons- motorists from the hazard created against ible motorists unidentified hit-and-run drivers persons protect, class of whom it was intended to bewilders me.10 presents legislature event, this case with 742.502(2) opportunity clarify thereby elimi- necessity judicial interpretation legislative
nate regarding question duty intent of when created that statute arises and when a new or later offer must be made. expressed opinion, agree
For reasons I Appeals grant- with the Court that the trial erred in court ing judgment summary for Allstate. If these facts do not show triggered duty a new contract that Allstate’s under ORS coverage, to make new offer of UM it *18 imagine would be difficult to what facts would. Hampshire require New became the first state to insurance com panies liability coverage policies to include uninsured motorist in all or issued by any state, principally delivered insurer licensed in that on vehicle motor used garaged Forty-nine legislation in state. that states now have in effect that types requirements coverage, for and it establishes various of has become an integral part policies throughout question, of automobile the United States. Without significant to be a of motorist continues source indemnification persons injured in automobile accidents. majority holding practical that, The effect policies regardless after the the number of new issued of original will never be made, the insurer has been coverage long as the offer of UM so a new to make relationship continues. insurer-insured between join
Fadeley JJ., in this dissent. Unis, dissenting. FADELEY, J., injured by motorist. an uninsured Plaintiff was defendant, insurer, her own Plaintiff seeks a declaration must cover- $100,000 her with only though provided age it stated her even injury. her Plaintiff as ofthe time of $25,000 such coverage arguing right to an increased amount claims the requires comply with a statute that that defendant failed to amounts of uninsured motorist insurers to offer increased issues their the insurer insureds whenever liability policy. once, made Defendant the offer motor vehicle in again plaintiff, it never with its first issuance to but higher amount of at issuance offered changes thereafter. numerous and renewals The which bases her claim this statute on provides part declaratory proceeding, 742.502, that: coverage larger of uninsured motorist than “Offers underin- required by amounts ORS 806.070 shall include ** * cov- equal surance the uninsured motorist amount recovered from other erage benefits less the added.) policies.” (Emphasis automobile remedy prescribe any for failure to make statute does not by plural, required it. offers, stated in the remedy That lack of is a matter consideration my opinion. legislature, The statute court, not this requires At offer, additional contract. not inclusion of an argument, that, if a new offer was oral statutorily required the insurer indicated case, should declare
in this the court plaintiffs policy $100,000 are for uninsured limits coverage. questioning that rem- correctness of No contention edy was raised.1 1Normally, parties may remedies. assumptions not dictate the court’s hypothetical
Otherwise, against deciding a case could be circumvented our rule *19 —
I cannot that the agree legislature’s purpose increase the amount of insurance available to pay — the costs of injuries Oregonians met majority’s limiting interpretation of the statute. mandatory Specifically, I do not that the meant to limit agree legislature the written offer of uninsured underinsured to the only first that time deals with one company of its individual matter customers, no how later times there is many a change in the insurance contract that is in force between the com- Yet, and that individual insured. that pany inter- limiting which pretation, substantially of the negates purpose statute, is the effect of sole to the insurer delegating authority to decide what constitutes issuing and, new there- “policy” fore, ever, at what if a new offer of point, underinsured coverage must be made. But that to the insurer is delegation of the I basis cannot in that majority’s opinion. join statute, of the limiting interpretation interpretation negates purpose dissenting statute. opinion has the better of the the correct inter- argument concerning of the statute. pretation — a new issuance my opinion, triggering occurred
the statutory duty to offer a amount of uninsured larger — each time that there was a major change between provisions coverage applicable plaintiff Not period defendant. renewals for a new as counting issuance, new there were major changes nonetheless several after insured during years became defendant’s but to her prior injuries declaratory prompted I proceeding. cannot Accordingly, join majority opinion’s reasoning. Thomas, 182, 186 See parties. n State agreements between 311 Or 806 P2d (1991) (parties appellate only arguments limit court cannot raise). case, agreed
parties granting would In this the declaration which the insurer cases, my opinion. proper precedent be would not form a for other