OR DFR Bulletin 2001-01: OAR 836-080-0240 – Standards for Prompt & Fair Settlement – Automobile Insurance

INSURANCE DIVISION BULLETIN INS 2001-1

DATE: March 12, 2001

TO: Property/Casualty Insurers and Other Interested Parties

SUBJECT: Oregon Administrative Rule 836-080-0240

Standards for Prompt & Fair Settlement-Automobile Insurance

The Insurance Division has received a number of questions regarding Oregon Administrative Rule

(OAR) 836-080-0240 and the manner in which insurers have interpreted and applied this rule. The rule

governs the settlement of total losses of motor vehicles. The purpose of this bulletin is to clarify the

intent of this Administrative Rule.

1. Responsibility for Data.

Under OAR 836-080-0240(3) insurers are responsible for the determination of value of total loss

vehicles.

2. Cash Settlement; Application of Standards in the Rule.

Comparability Standards. OAR 836-080-0240(3)(a)(B) requires an insurer to apply "appropriate

standards for comparability" when relying on values of currently available vehicles for the purpose

of a cash settlement. These standards are the same comparability standards described in OAR 836-

080-0240(2), except that an insurer may make adjustments for condition, options, and mileage. Any

adjustments made must be explained and verifiable.

3. Cash Settlement; Valuation Report.

Cash Settlement; Required Information. OAR 836-080-0240(3) requires an insurer, who makes a

cash settlement, to furnish to the insured the information used in determining the amount of the cash

settlement. This requirement is useful and meaningful to an insured only if the insured knows that,

upon request by the insured, the information is available and must be furnished. It is the intent of this

rule that an insurer must give written notice to an insured or claimant that the information is

available upon request. This notice must be given at the time of the initial settlement offer, and

documented in the claim file.

Included Information

ul to an insured only if the insured knows that,

upon request by the insured, the information is available and must be furnished. It is the intent of this

rule that an insurer must give written notice to an insured or claimant that the information is

available upon request. This notice must be given at the time of the initial settlement offer, and

documented in the claim file.

Included Information. The valuation report produced pursuant to OAR 836-080-0240(3)(a) must

contain only the information that the insurer used to arrive at the fair market value of the automobile.

Any supplemental or ancillary information must be clearly identified with a separate heading.

Condition Report Required. It is the intent of OAR 836-080-0240(3)(a) that each report include the

information collected during the initial inspection that sets forth the condition and equipment of the

loss vehicle.

Department of Consumer and Business Services

Insurance Division

350 Winter St. NE, Room 440

PO Box 14480

Salem, OR 97301-0405

(503) 947-7980

FAX (503) 378-4351

TTY (503) 947-7280

www.oregoninsurance.org

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4. Recourse. OAR 836-080-0240(4) offers recourse to first-party claimants. It is the intent of this rule

that this option be clearly explained to the insured in writing, and documented in the claim file, at the

time of settlement or settlement offer.

5. Effective Date of Bulletin. This bulletin is effective April 1, 2001.

This bulletin is dated the 13th day of March 2001 at Salem, Oregon.

_______(signed)_______

Joel Ario

Insurance Administrator