The Oregon Supreme Court has ruled that insurers satisfy their obligation under Oregon’s “choice-of-shop” notice law by using language approved by the state’s insurance regulator, even if the language does not fully reflect the current content of the law. The April 2025 decision in Bellshaw v. Farmers Insurance Company of Oregon reversed a $26.3 million judgment against the insurer and significantly limits insurer liability under ORS 746.290(2).
The dispute began when Steven Bellshaw, an Oregon policyholder, filed a class action lawsuit against Farmers Insurance Company of Oregon. He alleged that the company’s notice, issued with his motor vehicle insurance policy in 2011, violated ORS 746.290(2)(b), which requires every policy to be accompanied by:
“a statement in clear and conspicuous language approved by the director of [...] (b) The provisions of ORS 746.280.”
The statute cross-referenced in the notice, ORS 746.280, prohibits insurers from requiring policyholders to use specific motor vehicle repair shops. In 2007, the Oregon Legislature amended that statute to include three additional subsections (2) through (4), imposing further disclosure and conduct requirements on insurers when recommending repair shops.
Farmers’ notice, however, included only the original language of ORS 746.280(1), which had been approved for use in a 1993 bulletin by the Department of Consumer and Business Services (DCBS). That bulletin was withdrawn in 2003, but Farmers continued using the same notice language. Bellshaw claimed the notice was deficient because it failed to reflect the amendments made in 2007.
The trial court agreed, concluding that ORS 746.290(2) imposed an independent obligation on insurers to ensure their notices included the complete provisions of ORS 746.280. The court imposed a statutory penalty of $100 per violation under ORS 746.300, totaling more than $26 million in damages. The Oregon Court of Appeals affirmed the ruling.
The Oregon Supreme Court reversed both decisions. Writing for the majority, Justice Garrett concluded that ORS 746.290(2) imposes only one obligation on insurers: to use notice language approved by the director of DCBS. If the insurer uses such approved language, it complies with the law—regardless of whether the approved notice reflects all parts of ORS 746.280.
The Court emphasized that the phrase “approved by the director” was added to the statute in 1977 specifically to give insurers a safe harbor against liability. The legislative history showed that lawmakers intended the director’s approval to be determinative of compliance, in part to alleviate insurer concerns about unclear or evolving notice requirements.
“This case is not about who decides whether a notice complies,” the Court explained. “Rather, it is about what the statute requires an insurer to do. The answer is that the insurer must use language approved by the director. That is the entirety of its obligation under ORS 746.290(2).”
The Court remanded the case to the circuit court to determine whether Farmers had, in fact, used language that was approved by the director at the time the policy was issued. While the notice closely tracked the 1993 bulletin, that document had been withdrawn. However, the record also showed that DCBS approved Farmers’ form in 2016—after the lawsuit was filed—when the agency began requiring submission of ORS 746.290(2) notices through the form pre-approval process. The Court declined to rule on the legal significance of the 2003 withdrawal or the 2016 approval, noting that those questions had not been fully briefed.
The notice provision at issue was not part of the insurance policy contract but was a separate consumer protection notice required by statute. Under ORS 746.300, failure to comply with the notice requirement can result in a statutory penalty, which formed the basis of the class action. The Supreme Court’s ruling narrows the scope of such liability by confirming that it is the director’s approval, not the completeness of the notice, that determines whether the insurer met its legal duty.
In a dissenting opinion, Justice James, joined by Justice Masih, argued that the majority’s reading improperly shielded insurers from accountability. The dissent contended that the statutory obligation to state “the provisions of ORS 746.280” must mean that the notice include the full, accurate content of the statute, not just whatever the director may have approved—especially when the approved language predates statutory amendments.
The majority disagreed, holding that the plain text, structure, and legislative history of the statute establish that an insurer is not independently liable for omitting statutory subsections if it used director-approved wording.
The ruling in Bellshaw provides welcome clarity for insurers operating in Oregon and potentially beyond. It confirms that liability under ORS 746.290(2) turns solely on whether the insurer used language approved by the DCBS director. For companies concerned about exposure from outdated or incomplete statutory references in their notices, the case reinforces the importance of regulatory approval as a compliance benchmark.
For the insurance industry, the decision underscores the value of following approved regulatory guidance—even if that guidance lags behind legislative amendments. For policyholders, the ruling may raise questions about the adequacy of consumer disclosures under outdated notices, but the Court made clear that the remedy lies with the regulator, not the courts.
As insurers revisit their compliance protocols, Bellshaw stands as a key precedent defining the relationship between insurer obligations, statutory language, and agency oversight in the realm of auto insurance regulation.
