EXPEDITED RULES
INSURANCE COMMISSIONER
Title of Rule: Automobile claims, repairs, and total loss settlements.
Purpose: This rule making intends to correct a provision in the recently adopted rules regarding automobile claims, repairs, and total loss settlements.
Other Identifying Information: Insurance Commissioner Matter No. R 2003-07.
Statutory Authority for Adoption: RCW 48.02.060, 48.30.010.
Statute Being Implemented: RCW 48.02.060, 48.30.010.
Summary: The timeframe in WAC 248-30-3912 (3)(b) is changed from thirty-five days to three days to limit possible administrative costs.
Reasons Supporting Proposal: The change will make the regulation easier and more cost-effective to administer. Insureds receive the same protections but can't reopen a file without fulfilling their own duties.
Name of Agency Personnel Responsible for Drafting: Jon Hedegard, P.O. Box 40255, Olympia, (360) 725-7039; Implementation and Enforcement: Scott Jarvis, P.O. Box 40255, Olympia, (360) 725-7262.
Name of Proponent: Mike Kreidler, Insurance Commissioner, governmental.
Rule is not necessitated by federal law, federal or state court decision.
Explanation of Rule, its Purpose, and Anticipated Effects: The Recent Rule Making: The Office of the Insurance Commissioner (OIC) recently completed major overhaul of the regulation of practices regarding automobile claims, repairs, and total loss settlements. The new regulation should be clearer and easier to understand and administer. One component in that rule-making was the "right of recourse." The OIC has received complaints from insureds who tried to replace their vehicle and found that their settlement amount was inadequate. The newly adopted regulation addressed that issue in two ways. First, the processes to determine if a vehicle is comparable were tightened up. Second, an insured who can't find a comparable replacement for the amount can notify the insurer and have the file "reopened." An insurer is not required to open the file if they provided notice of a specific, comparable vehicle available for the settlement amount and the insured did not buy that vehicle.
This Rule Making: The timeline for the insured's action was inadvertently lengthened in the previous rules process from three days to thirty-five days. The latter timeframe could result in insured not acting promptly on available vehicles which end up being sold to other parties. In that scenario, the settlement amount could be quite accurate but the insured could compel a reopening of the file because of their inaction. This could lead to increased administrative costs for little benefit. It is this scenario that the OIC is addressing in this new rule making.
Proposal Changes the Following Existing Rules: The
timeframe in WAC 248-30-3912 (3)(b) is changed from
thirty-five days to three days.
THIS RULE IS BEING PROPOSED UNDER AN EXPEDITED RULE-MAKING PROCESS THAT WILL ELIMINATE THE NEED FOR THE AGENCY TO HOLD PUBLIC HEARINGS, PREPARE A SMALL BUSINESS ECONOMIC IMPACT STATEMENT, OR PROVIDE RESPONSES TO THE CRITERIA FOR A SIGNIFICANT LEGISLATIVE RULE. IF YOU OBJECT TO THE USE OF THE EXPEDITED RULE-MAKING PROCESS, YOU MUST EXPRESS YOUR OBJECTIONS IN WRITING AND THEY MUST BE SENT TO Kacy Scott, Insurance Commissioner, P.O. Box 40255, Olympia, WA 98504-0255, e-mail Kacys@oic.wa.gov, fax (360) 586-3109 , AND RECEIVED BY December 2, 2003.
October 1, 2003
Mike Kreidler
Insurance Commissioner
OTS-6707.1
AMENDATORY SECTION(Amending Matter No. R 2002-06, filed
6/30/03, effective 10/1/03)
WAC 284-30-3912
What if I, as an insured, accept the
settlement based on my insurer's valuation and cannot find a
comparable vehicle within a reasonable distance of my
vehicle's principally garaged area?
(1) When you accept the
settlement, your insurer must provide you with written notice
regarding reopening of your claim file.
(2) If you notify your insurer within thirty-five days of receipt of the settlement that you cannot purchase a comparable vehicle for the settlement amount and you located, but did not purchase a comparable vehicle that costs more than the settlement amount, your insurer must reopen your claim file and either:
(a) Locate a comparable vehicle that is currently available for the settlement amount;
(b) Pay you the difference between the settlement amount and the cost of the comparable vehicle or purchase the comparable vehicle for you; or
(c) If not previously utilized, conclude the loss settlement in the manner provided in the appraisal section of your insurance policy in force at the time of the loss.
(3) Your insurer is not required to reopen your claim file if:
(a) At the time of settlement, you were provided written notification of the availability and location of a specific and comparable vehicle that could have been purchased for the settlement amount; and
(b) You did not purchase the vehicle within
((thirty-five)) three days of the receipt of the settlement.
[Statutory Authority: RCW 48.02.060, 48.30.010. 03-14-092 (Matter No. R 2002-06), § 284-30-3912, filed 6/30/03, effective 10/1/03.]