HOUSE BILL REPORT

HB 511

BYRepresentatives Meyers, Niemi, Dellwo, Sprenkle, Lux, Sayan, Nutley, P. King, Braddock, Grant, Grimm, Crane and Wang

Requiring motor vehicle liability insurance policies to provide personal injury protection benefits.

House Committe on Financial Institutions & Insurance

Majority Report:     The substitute bill be substituted therefor and the substitute bill do pass.  (11)

     Signed by Representatives Lux, Chair; Zellinsky, Vice Chair; Chandler, Crane, Dellwo, Grimm, P. King, Meyers, Niemi, Nutley and Winsley.

Minority Report:     Do not pass.  (2)

     Signed by Representatives Day and Ferguson.

House Staff:John Conniff (786-7119)

AS REPORTED BY COMMITTEE ON FINANCIAL INSTITUTIONS & INSURANCE

FEBRUARY 25, 1987

BACKGROUND:

Automobile insurance companies currently offer "personal injury protection" coverage which is a form of medical coverage that pays for the insured's medical expenses, loss of wages, and loss of services.  The benefits are provided without regard to fault in an accident and are provided subject to dollar limits and time limits.  For example, a typical coverage may provide up to ten thousand dollars of benefits for all costs incurred within one year of the automobile accident.

The insurance code does not contain an explicit provision authorizing the Insurance Commissioner to regulate such coverage nor does the code require insurers to offer such coverage to policyholders who wish to purchase such coverage.  Recently, the Commissioner issued regulations requiring insurers to offer greater limits of coverage to policyholders willing to pay for benefits.  An insurance company has sued the commissioner challenging the commissioner's authority to adopt such regulations in the absence of a specific statutory grant of authority.  The case is currently pending before the Washington State Supreme Court.

Stacking of coverage occurs when a policyholder claims that since there are two cars insured under the policy, benefits should be doubled.  Courts have generally approved of policy provisions prohibiting this stacking of medical coverage.

SUMMARY:

SUBSTITUTE BILL:  Motor vehicle liability insurers must offer personal injury protection benefit coverage in every private passenger automobile insurance policy unless the named insured or spouse rejects such coverage in writing.  Motor vehicle liability policy and insured are defined.

Such coverage must provide at least two thousand dollars in benefits for funeral expenses, at least ten thousand dollars in benefits for loss of income, and at least five thousand dollars in benefits for the loss of the insured's services.  Such coverage need not be provided for commercial "umbrella" liability policies, and motorcycle policies and such coverage may not be "stacked" by the policyholder in order to double the coverage.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  Clarifications are made and coverage is limited to private passenger automobile policies.  In addition, insurers need not provide coverage for commercial "umbrella" policies and coverage may not be "stacked".

Fiscal Note:    Not Requested.

House Committee ‑ Testified For:     None Presented.

House Committee - Testified Against: None Presented.

House Committee - Testified Against: None Presented.

House Committee - Testimony Against: None Presented.