Vehicle owners whose cars or trucks get declared a total loss after a crash may have an easier time negotiating settlements with their insurance companies under a new state law.

The law, which became effective Jan. 1, requires insurance companies to explain in writing how they determined vehicles to be totaled, how they arrived at values for the vehicles and what owners can do if they disagree with the settlement offers.

Passed by the Legislature last spring, the new regulations seek to address one of the most persistent complaints consumers make to state business and consumer officials.

State Rep. Judy Stiegler, D-Bend, who voted for the legislation, said it gives consumers a little leverage with insurance companies in negotiations.

“It’s a consumer-protection issue,” she said Thursday. “What (it does) is put insurance companies and consumers on a more equal footing.”

The law will likely add work for insurance companies — which brought opposition from some Republican lawmakers — but one independent insurance agent in Bend called it a good idea, one that will reduce much of the hassle for both consumers and companies.

“It actually makes good sense from my perspective,” said Danny Duggan, a partner in Century Insurance Group. “Our customers’ biggest issue is the lack of information. How did they come up with the dollar amount?”

Duggan does not believe the additional costs will be too burdensome for insurance companies, and reducing or eliminating a major source of friction between customers and the companies will make life better for claims employees, customer service workers and others in the insurance industry.

“I think it will alleviate a lot of the pain and suffering of negotiation,” Duggan said.

Last year, the state Department of Consumer and Business Services received 384 phone calls and 96 complaints about negotiations with insurance companies over totaled vehicles, said Lisa Morawski, communications director.

The latter figure represents about 2.5 percent of the total insurance-related complaints received by the department, which is the state’s largest regulatory agency. Along with auto insurance, it oversees health, life, and homeowners and renters insurance regulations, along with building codes, financial services, occupational safety and others.

“Given the breadth (of areas) we cover, 96 complaints about one topic is quite high,” Morawski said.

Along with providing information, the law requires insurance companies to pay at least the portion of the vehicle’s value upfront that is not in dispute — not wait until negotiations are finished.

For example, if the insurance company offers a $9,000 settlement but the owner wants $10,000, the company must pay the $9,000 while negotiations continue over the rest.

Also, with some exceptions, the insurance company must reimburse the vehicle owner for his or her appraisal costs if the final amount is more than the company’s last offer.

The latter two provisions apply to new policies or renewals written after Jan. 1. Many insurance companies write policies that extend six months or more, so owners might have a gap between Jan. 1 and their policy renewal date.

While the bill passed easily, all of Central Oregon’s Republican lawmakers in both the House and Senate voted against it.

Rep. Gene Whisnant, R-Sunriver, said some lawmakers feared new regulations would prompt insurance companies to raise rates.

“I was concerned … that it would put more burden on the companies,” he said, “who would pass (the costs) along to consumers.”

The new rules

A new state law requires auto insurance companies to:

• Give car owners a written notice that explains total loss, including how car values are determined and what to do if the owner disagrees with the company’s offer.

• Give consumers the appraisal reports used to set the vehicle’s value. Currently, a consumer must ask for a copy.

• Pay car owners the amount not in dispute while negotiations over value continue.

• Reimburse consumers for reasonable appraisal costs, if the owner has the right to an appraisal and the final appraised value is greater than the company’s last offer.

Source: Oregon Department of Consumer and Business Services

Where to find help

Consumer advocates from the Consumer and Business Services Department’s Insurance Division will answer questions or take complaints about insurance matters. Contact them toll-free at 888-877-4894.

For additional consumer information about vehicle and other insurance issues visit, http://insurance.oregon.gov/.