What Is The Time for Responding to a Defense Tender?
Insurers must acknowledge an initial claim within 30 days of receipt. Or. Admin. R. § 836-080-225.
Insurers must accept or deny coverage within 30 days after receipt of proof of loss. Or. Admin. R. § 836-080-235.
Does Reserving Rights Create a Conflict of Interest?
No cases found.
Does a Reservation of Rights Create Additional Duties?
Where a conflict of interest exists, the insurer may still retain the right to select counsel to defend its policyholder but has an enhanced duty of good faith as a result. Ferguson v. Birmingham Fire Ins. Co., 460 P.2d 342, 348 (Or. 1969).
What Must Be Done If A Conflict of Interest Exists?
Where there is a conflict of interest between insured and insurer, the rule of estoppel by judgment will not apply in any subsequent action by the insured for coverage, reasoning: “If the judgment in the original action is not binding upon the insurer or insured in a subsequent action on the issue of coverage, there would be no conflict of interests between the insurer and the insured in the sense that the insurer could gain any advantage in the original action which would accrue to it in a subsequent action in which coverage is in issue.” Ferguson v. Birmingham Fire Ins. Co., 460 P.2d 342, 349 (Or. 1969).
Who Is Responsible for Fees of Independent Counsel?
The insurer. See above.
What Are Independent Counsel’s Obligations?
No cases found.
What Settlement Duties Exist?
An insurer may be liable for failing to solicit an offer to settle within limits, where warranted, even if the claimant never actually made such an offer. Maine Bonding & Casualty Co. v. Centennial Ins. Co., 693 P.2d 1296, 1299 (Or. 1985).
An insurer has a duty to settle within the policy limits if it is reasonable to do so. The violation of this duty gives rise to a tort action. Georgetown Realty v. Home Ins. Co., 831 P.2d 7, 8 (Or. 1992).
What Actions May Result in a Claim for Bad Faith?
An insured may pursue a bad faith claim grounded in tort against an insurer, but such a claim may not arise solely from the contractual relationship; rather it must be based upon the insurer’s breach of independent duty owed to the insured. Georgetown Realty v. Home Ins. Co., 831 P.2d 7, 8 (Or. 1992).
A negligence claim arises between contracting parties only when a standard of care exists independent of the contract. When a liability insurer agrees to defend the insured, “[t]he insured relinquishes control over the defense of the claim asserted. Its potential monetary liability is in the hands of the insurer.” This relationship carries an independent standard of care, and the insured can bring a claim in negligence for failure to meet that standard of care. Georgetown Realty v. Home Ins. Co., 831 P.2d 7, 8 (Or. 1992).
The Unfair Claims Settlement Act does not provide a private cause of action for bad faith claims settlement. Or. Rev. Stat. § 746.230(1)(f); Employers’ Fire Ins. Co. v. Love It Ice Cream Co., 670 P.2d 160, 164 (Or. Ct. App.1983).
Are Attorney’s Fees Recoverable in Insurer-Insured Dispute?
Attorney’s fees may be recoverable. Or.. Rev. Stat. § 742.061 provides the exclusive remedy for obtaining attorney fees in disputes arising out of insurance policies. “[I]f settlement is not made within six months from the date proof of loss is filed with an insurer and an action is brought in any court of this state upon any policy of insurance of any kind or nature, and the plaintiff’s recovery exceeds the amount of any tender made by the defendant in such action, a reasonable amount to be fixed by the court as attorney fees shall be taxed as part of the costs of the action and any appeal thereon.” Or.. Rev. Stat. § 742.061.
Are Punitive Damages Recoverable in Insurer-Insured Dispute?
Punitive damages are recoverable for failure to settle claims under a liability policy. The insured must prove by “clear and convincing evidence that the insurer acted intentionally or recklessly to protect its own interests at the expense of the insured’s and that it had ample reason to know that there was a great risk of an excess judgment against the insured if it did not avail itself of opportunities to settle the underlying action.” Georgetown Realty v. Home Ins. Co., 833 P.2d 1333 (1992).
Alternative Coverage Options
An insurer cannot proceed with a declaratory judgment action that would require factual findings that may be inconsistent with the underlying claim against the insured. North Pacific Ins. Co. v. Wilson’s Distributing Service, Inc., 908 P.2d 827, 832 (Or. 1995).
Relevant Statutes
Declaratory Judgment – Or. Rev. Stat. § 28.010.
“Courts of record, within their respective jurisdictions shall have power to declare rights, status, and other legal relations, whether or not further relief is or could be claimed. No action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for. The declaration may be either affirmative or negative in form and effect, and such declarations shall have the force and effect of a final judgment or decree.”
Unfair Claims Settlement Act – Or. Rev. Stat. § 746.230.