Opinion ID: 1862787
Heading Depth: 2
Heading Rank: 1

Heading: Limitations period runs from the date of breach.

Text: Although not advanced by either party in this case, some courts have adopted the rule that absent express language in the policy terms, a claim for UIM benefits is based on contract and therefore the contract statute of limitations applies. See 1 Widiss § 7.7, at 349 (stating that absent specific language in the policy, appellate court decisions almost uniformly hold that a claim for uninsured motorist insurance benefits is a contractual right and contract statute of limitations therefore applies). The theory also holds that because the claim for uninsured or underinsured motorist benefits is contractual, the policy limitations period for bringing a UIM claim begins to run on the date that the insurance company breaches the insurance contract. [6] The reasoning behind this theory is that because a claim for UM or UIM benefits is based on contract, the limitations period begins to run on the date that the insurance contract is breached, generally, when the insurance company denies the insured's claim for benefits. See Vega v. Farmers Ins. Co., 323 Or. 291, 918 P.2d 95, 98 (1996), superseded by statute in Or.Rev.Stat. §§ 742.504(4)(A), 742.504(12) (1999) (allowing insurer to include language stating that no cause of action shall accrue to the insured under UM/UIM coverage unless insured has filed an action against insurer within two years from date of accident); Joel S. DeVore, Vega v. S.B. 645: Underinsured Motorist Coverage and the Exhaustion Clause, 34 Willamette L.Rev. 327, 344 (1998) (discussing how Vega has been overruled by legislation). Because the insurer's liability is contract-based, the relevant date is the date when the insurance company allegedly breaches its contract with its insured. See Vega, 918 P.2d at 98. This theory is considered the majority view. See Wille v. Geico Cas. Co., 2 P.3d 888, 890 (Okla.2000); accord Kelso & Drevlow, at 694.