BP BHEAD INT H

AN ACT Relating to underinsured motor vehicle insurance coverage; and amending RCW 48.22.030.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. RCW 48.22.030 and 1985 c 328 s 1 are each amended to read as follows:

(1) "Underinsured motor vehicle" means a motor vehicle with respect to the ownership, maintenance, or use of which either no bodily injury or property damage liability bond or insurance policy applies at the time of an accident, or with respect to which the sum of the limits of liability under all bodily injury or property damage liability bonds and insurance policies applicable to a covered person after an accident is less than the applicable damages which the covered person is legally entitled to recover. A vehicle owned or leased by a governmental entity or the political subdivisions or agencies thereof, or a vehicle operated within the scope of their employment by an employee or agent of a governmental entity, including its subdivisions or agencies, is not an "underinsured motor vehicle" within the meaning of this section. However any such vehicle is considered an "underinsured motor vehicle" if the government entity is unable to satisfy a claim because of financial inability or insolvency.

(2) No new policy or renewal of an existing policy insuring against loss resulting from liability imposed by law for bodily injury, death, or property damage, suffered by any person arising out of the ownership, maintenance, or use of a motor vehicle shall be issued with respect to any motor vehicle registered or principally garaged in this state unless coverage is ((~~provided therein or supplemental thereto~~)) available for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of underinsured motor vehicles, hit-and-run motor vehicles, and phantom vehicles because of bodily injury, death, or property damage, resulting therefrom, except while operating or occupying a motorcycle or motor-driven cycle, and except while operating or occupying a motor vehicle owned or available for the regular use by the named insured or any family member, and which is not insured under the liability coverage of the policy. The coverage required to be offered under this chapter is not applicable to general liability policies, commonly known as umbrella policies, or other policies which apply only as excess to the insurance directly applicable to the vehicle insured.

(3) Except as to property damage, coverage ((~~required~~)) made available under subsection (2) of this section shall be in the same amount as the insured's third party liability coverage ((~~unless the insured rejects all or part of the coverage as provided in subsection (4) of this section~~)). Coverage for property damage need only be issued in conjunction with coverage for bodily injury or death. Property damage coverage required under subsection (2) of this section shall mean physical damage to the insured motor vehicle unless the policy specifically provides coverage for the contents thereof or other forms of property damage.

(4) A named insured ((or spouse may reject, in writing, underinsured coverage for bodily injury or death, or property damage, and the requirements of subsections (2) and (3) of this section shall not apply. If a named insured or spouse has rejected underinsured coverage, such coverage shall not be included in any supplemental or renewal policy unless a named insured or spouse subsequently requests such coverage in writing. The requirement of a written rejection under this subsection shall apply only to the original issuance of policies issued after July 24, 1983, and not to any renewal or replacement policy)) must affirmatively indicate, in the customary way, the desire to have the underinsured coverage provided for under this section included in his or her policy; the named insured does not have to reject the coverage in writing.

(5) The limit of liability under the policy coverage may be defined as the maximum limits of liability for all damages resulting from any one accident regardless of the number of covered persons, claims made, or vehicles or premiums shown on the policy, or premiums paid, or vehicles involved in an accident.

(6)(a) The policy may provide that if an injured person has other similar insurance available to him under other policies, the total limits of liability of all coverages shall not exceed the higher of the applicable limits of the respective coverages.

(b) Before seeking to recover benefits under the coverage described in this section, the injured person must first recover damages from the owners or operators of any underinsured motor vehicle whose fault is a basis for the injured person's claim against the insurer, to the extent that the owners or operators have available liability insurance. If the injured person settles the claim against any such owner or operator for an amount less than the applicable limit of that person's available liability insurance, then the coverage described in this section does not apply to a claim based on the owner's or operator's fault.

(c) An insurer providing the coverage described in this section is entitled to offset against the injured person's damages any amounts paid to or on behalf of the injured person because of the accident. This provision does not apply to a payment under a life insurance policy.

(7)(a) The policy may provide for a deductible of not more than three hundred dollars for payment for property damage when the damage is caused by a hit-and-run driver or a phantom vehicle.

(b) In all other cases of underinsured property damage coverage, the policy may provide for a deductible of not more than one hundred dollars.

(8) For the purposes of this chapter, a "phantom vehicle" shall mean a motor vehicle which causes bodily injury, death, or property damage to an insured and has no physical contact with the insured or the vehicle which the insured is occupying at the time of the accident if:

(a) The facts of the accident can be corroborated by competent evidence other than ((~~the~~)) statements, declarations, or testimony of the insured or any person having an underinsured motorist claim resulting from the accident; and

(b) The accident has been reported to the appropriate law enforcement agency within seventy-two hours of the accident.

(9) The policy may provide that the injured person must provide written notice within three years of the date of the accident of intent to pursue a claim under the coverage described in this section and that failure to do so is a complete defense to any such claim.

(10) There is no presumption that any policy exclusion or limitation not specifically authorized by this section is invalid. The enforceability of such limitations or exclusions must be determined based on their particular application, the purpose of this section, and other existing laws.