BILL REQ. #:  S-0913.1 

Read first time 01/29/09.   Referred to Committee on Financial Institutions, Housing & Insurance.

     AN ACT Relating to a pay-as-you-drive motor vehicle insurance product; amending RCW 46.29.490; and creating a new section.

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

NEW SECTION.  Sec. 1   The legislature finds that:
     (1) Recent increases in gasoline prices have inflated the costs of transportation, requiring Washington families to spend more of their income on transportation and further stretching families' limited budgets;
     (2) Consistent with chapter 348, Laws of 2007, climate change, due in part to vehicles emitting greenhouse gases, is expected to have significant impacts in the Pacific Northwest region in the near and long-term future, including: Increased temperatures; declining snowpack; more frequent heavy rainfall and flooding; receding glaciers; rising sea levels; increased risks to public health due to insect and rodent-borne diseases; declining salmon populations; and increased drought and risk of forest fires;
     (3) Consistent with chapter 14, Laws of 2008, the state intends to take steps to limit and reduce emissions of greenhouse gas and reduce emissions at the lowest cost to Washington's economy;
     (4) A reduction in the average vehicle miles traveled per Washington motorist may lead to a substantive reduction in greenhouse gas emissions;
     (5) Providing insurance-based incentives to motorists to drive less may reduce overall vehicle miles traveled;
     (6) Current state automotive insurance rates do not reflect the miles that motorists drive;
     (7) According to the United States environmental protection agency, once an individual purchases a car, roughly eighty-eight percent of his or her transportation costs remain much the same on a monthly basis regardless of how much or how little he or she drives;
     (8) The increase in traffic density from a typical additional driver increases total statewide insurance costs of other drivers;
     (9) Implementing new programs that offer insurance on a mileage basis may effectively reduce vehicle miles traveled and help the state achieve its goals to reduce gas emissions;
     (10) Verifying miles driven ensures insurance rates that more accurately reflect vehicle miles traveled and provides incentives for Washington drivers to reduce driving and emissions; and
     (11) Verifying miles driven will better enable insurance companies to charge accurate rates based on actual miles driven.

Sec. 2   RCW 46.29.490 and 1980 c 117 s 6 are each amended to read as follows:
     (1) Certification. A "motor vehicle liability policy" as said term is used in this chapter means an "owner's policy" or an "operator's policy" of liability insurance, certified as provided in RCW 46.29.460 or 46.29.470 as proof of financial responsibility for the future, and issued, except as otherwise provided in RCW 46.29.470, by an insurance carrier duly authorized to transact business in this state, to or for the benefit of the person named in the policy as insured.
     (2) Owner's policy. Such owner's policy of liability insurance:
     (a) Shall designate by explicit description or by appropriate reference all vehicles with respect to which coverage is to be granted by the policy; and
     (b) Shall insure the person named therein and any other person, as insured, using any such vehicle or vehicles with the express or implied permission of such named insured, against loss from the liability imposed by law for damages arising out of the ownership, maintenance, or use of such vehicle or vehicles within the United States of America or the Dominion of Canada, subject to limits exclusive of interest and costs, with respect to each such vehicle as follows: Twenty-five thousand dollars because of bodily injury to or death of one person in any one accident and, subject to said limit for one person, fifty thousand dollars because of bodily injury to or death of two or more persons in any one accident, and ten thousand dollars because of injury to or destruction of property of others in any one accident.
     (3) Operator's policy. Such operator's policy of liability insurance shall insure the person named as insured therein against loss from the liability imposed upon him by law for damages arising out of the use by him of any motor vehicle not owned by him, within the same territorial limits and subject to the same limits of liability as are set forth above with respect to an owner's policy of liability insurance.
     (4) Required statements in policies. Such motor vehicle liability policy shall state the name and address of the named insured, the coverage afforded by the policy, the premium charged therefor, the policy period, and the limits of liability, and shall contain an agreement or be endorsed that insurance is provided under the policy in accordance with the coverage defined in this chapter as respects bodily injury and death or property damage, or both, and is subject to all the provisions of this chapter.
     (5) Policy need not insure workers' compensation, etc. Such motor vehicle liability policy need not insure any liability under any workers' compensation law nor any liability on account of bodily injury or death of an employee of the insured while engaged in the employment, other than domestic, of the insured, or while engaged in the operation, maintenance, or repair of any such vehicle nor any liability for damage to property owned by, rented to, in charge of, or transported by the insured.
     (6) Provisions incorporated in policy. Every motor vehicle liability policy is subject to the following provisions which need not be contained therein:
     (a) The liability of the insurance carrier with respect to the insurance required by this chapter becomes absolute whenever injury or damage covered by said motor vehicle liability policy occurs; said policy may not be canceled or annulled as to such liability by any agreement between the insurance carrier and the insured after the occurrence of the injury or damage; no statement made by the insured or on his behalf and no violation of said policy defeats or voids said policy.
     (b) The satisfaction by the insured of a judgment for such injury or damage shall not be a condition precedent to the right or duty of the insurance carrier to make payment on account of such injury or damage.
     (c) The insurance carrier may settle any claim covered by the policy, and if such settlement is made in good faith, the amount thereof is deductible from the limits of liability specified in subdivision (b) of subsection (2) of this section.
     (d) The policy, the written application therefor, if any, and any rider or endorsement which does not conflict with the provisions of this chapter constitutes the entire contract between the parties.
     (7) Mileage-based coverage. Any policy that grants the coverage required for a motor vehicle liability policy may also grant lawful coverage based on mileage-based factors. A mileage-based motor vehicle liability policy must be approved by the insurance commissioner.
     (8) Excess or additional coverage. Any policy which grants the coverage required for a motor vehicle liability policy may also grant any lawful coverage in excess of or in addition to the coverage specified for a motor vehicle liability policy, and such excess or additional coverage is not subject to the provisions of this chapter. With respect to a policy which grants such excess or additional coverage the term "motor vehicle liability policy" applies only to that part of the coverage which is required by this section.
     (((8))) (9) Reimbursement provision permitted. Any motor vehicle liability policy may provide that the insured shall reimburse the insurance carrier for any payment the insurance carrier would not have been obligated to make under the terms of the policy except for the provisions of this chapter.
     (((9))) (10) Proration of insurance permitted. Any motor vehicle liability policy may provide for the prorating of the insurance thereunder with other valid and collectible insurance.
     (((10))) (11) Multiple policies. The requirements for a motor vehicle liability policy may be fulfilled by the policies of one or more insurance carrier which policies together meet such requirements.
     (((11))) (12) Binders. Any binder issued pending the issuance of a motor vehicle liability policy is deemed to fulfill the requirements for such a policy.