“Second lawsuit” or “two lawsuits for one claim” proponents say they want to protect consumers and speed up insurance settlements. But strong, Oregon-specific laws already do a great job protecting Oregon consumers without adding expensive new lawsuits and driving up the cost of insurance. Here are the facts:

“Two lawsuits for one claim” could raise insurance rates for Oregonians

• The unnecessary bill opens the door for excessive and frivolous lawsuits, because it allows two lawsuits for a single insurance claim – one seeking damages from an at-fault party, then another against their insurance company. Even when they don’t go to trial, more lawsuits mean higher costs that often end up in consumers’ insurance premiums.

• Five states where similar legislation passed saw increases in insurance premiums. According to independent studies, Florida saw costs for auto liability insurance (which Oregon requires drivers to purchase) increase between 30% and 70%. Washington state currently allows “second lawsuits” for some claims and losses have increased 20 percent for all major lines of insurance, adjusted for inflation since this type of lawsuit was permitted.

“Two lawsuits for one claim” would cost Oregon taxpayers

• Insurance companies are already held accountable under rigorous oversight by the Oregon Department of Consumer and Business Services (DCBS).

• These proposals would significantly expand the workload of DCBS. Rather than regulating the market and protecting consumers, bills like these will transform the agency into an investigatory arm of personal injury lawyers by making them responsible for conducting investigations on their behalf - leading to excessive settlement demands and drawn-out, costly, and contentious lawsuits.

“Two lawsuits for one claim” will clog the courts with costly lawsuits

• Secondary lawsuit proposals would dramatically expand lawyers' ability to file a “bad faith” lawsuit against an insurance company and other persons seeking triple damages.

• This means that if somebody has an accident, be it in a car, home, or business, they can sue the person responsible and then also directly sue the insurance company.

• The possibility of winning a large settlement and court judgments with excessive damage awards creates a powerful incentive for personal injury lawyers to file frivolous or inflated insurance claims. Investigating and disproving these false claims – or settling excessive claims to avoid court costs - drives up rates for responsible policyholders.

Oregon has one of the strongest consumer protection laws in the country. Insurance companies are already held accountable under rigorous oversight by the Oregon Department of Consumer and Business Services (DCBS).

“Two lawsuits for one claim” proposals could create a messy litigation environment in Oregon, with insurance consumers, taxpayers and small businesses as the victims. It is critical that lawmakers know that it is Oregon businesses and consumers who would bear the burden of increased costs, higher tax rates, and expanded litigation.

OTHER STATES HAVE PASSED SIMILAR LEGISLATION WITH DEVASTATING RESULTS