Oregon Court of Appeals Rules GEICO Must Cover Permissive Driver, Awards $50,000 in Attorney Fees

Robert Ma was driving a vehicle with the owner's permission when he was involved in a car accident in Oregon. He submitted a claim for personal injury protection benefits under the vehicle owner's GEICO Casualty Company policy to cover his collision-related medical expenses, which totaled just over $8,000. GEICO denied the claim, taking the position that permissive drivers were not entitled to PIP benefits under Oregon law.

The trial court sided with GEICO, leaving Ma without coverage for his medical costs despite having been lawfully behind the wheel with the owner's consent. Travis Mayor of Mayor Law appealed the decision, arguing that Oregon statutes require insurers to extend PIP benefits to any person permitted by the named insured to use the vehicle.

The Oregon Court of Appeals agreed. In its February 29, 2012 opinion, cited as 248 Or App 479, 273 P.3d 334, the court reversed the trial court and held that permissive drivers of insured vehicles are entitled to personal injury protection coverage as a matter of Oregon law. The ruling closed an interpretation gap that insurance companies had been using to deny PIP claims.

Because GEICO had wrongfully denied a meritorious PIP claim, the court also awarded attorney fees under ORS 742.061. The fee award came to $50,000. When the underlying medical expenses, court costs, interest, and the fee award were totaled, GEICO paid $61,187.49. The Oregon Supreme Court declined review, and the decision now stands as settled precedent on permissive-driver PIP coverage in the state.