Washington State

House of Representatives

Office of Program Research

BILL

ANALYSIS

Business & Financial Services Committee

HB 2384

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Brief Description: Regulating personal vehicle sharing programs.

Sponsors: Representatives Hudgins, Bailey, Kirby, Condotta, Pedersen, Ryu, Fitzgibbon, Moscoso, Stanford, Upthegrove, Billig, Liias and Ladenburg.

Brief Summary of Bill

  • Transfers liability from an automobile insurer to a personal vehicle sharing program when the vehicle is in a personal vehicle sharing program.

  • Establishes minimum amounts of insurance coverage for a personal vehicle sharing program.

  • Establishes a framework for a personal vehicle sharing program.

Hearing Date: 1/20/12

Staff: Jon Hedegard (786-7127).

Background:

Every person in this state who operates a private passenger motor vehicle must be insured under an insurance liability policy, a liability bond, a certificate of deposit, or be self-insured. The minimum amounts of liability coverage required by the financial responsibility statutes are:

There are mandatory offerings of personal injury protection coverage and underinsured automobile coverage. There are a number of other types of coverage that be offered by an automobile insurer. Insurers may offer any type of coverage in any amount that is filed with and approved by the Insurance Commissioner (Commissioner). Automobile insurance rates and forms are filed with the Commissioner and must be approved by the Commissioner prior to use by an insurer. If the Commissioner determines that filed rates are not excessive, inadequate, or unfairly discriminatory, then the Commissioner must approve them.

Automobile rates may be adjusted for any factor that is not prohibited by law. Rates are often adjusted according to factors including the driver's age, sex, marital status, miles driven, claims history, geographical area, credit history, and the make, model, and year of a vehicle.

An insurer can refuse to insure, cancel, or non-renew an insurance policy for any reason that is not prohibited by law.

Summary of Bill:

Definitions.

An "owner's insurance policy" is an automobile liability insurance policy that includes all coverage necessary to comply with statutory requirements and any optional coverage selected by the owner, including personal injury protection coverage, underinsured coverage, comprehensive property damage coverage, and collision property damage.

"Personal vehicle sharing" is the use of a private passenger motor vehicle, by persons other than the vehicle's registered owner in connection with a personal vehicle sharing program.

"Personal vehicle sharing program" (program) is a legal entity qualified to do business in this state that facilitates the sharing of private passenger motor vehicles for noncommercial use by individuals within this state.

Insurance Requirements.

For each vehicle used in personal vehicle sharing, a program must provide insurance coverage for the vehicle, the designated operator of the vehicle and all persons who, with the consent of the program, use the motor vehicle insured under the policy. The limits for coverage must be:

Program Requirements.

A program must:

Record-keeping.

A program must collect and maintain:

Liability.

These records must be made available to the vehicle's registered owner, the vehicle's registered owner's primary automobile liability insurer, and any government agency as required by law.

Notwithstanding an owner's insurance policy or the financial responsibility laws, a program assumes all liability of the vehicle owner for any loss or injury that occurs when the vehicle is under a program and is considered the vehicle owner for all purposes.

The provisions of the bill do not limit:

A program continues to be liable until:

A program must assume liability for a claim in which a dispute exists as to who was in control of a private passenger motor vehicle when the loss giving rise to the claim occurred.

If a vehicle's registered owner was in control of the vehicle at the time of the loss, the insurer of the vehicle must indemnify the program to the extent of the insurer's obligation under the owner's insurance policy.

If a private passenger motor vehicle's registered owner is named as a defendant in a civil action for any loss or injury that occurs at any time when the vehicle is under the operation and control of a person, other than the vehicle's registered owner, pursuant to a program, or is otherwise under the control of a program, the program shall have the duty to defend and indemnify the vehicle's registered owner.

Notwithstanding any provision in the owner's insurance policy, while the vehicle is under the operation and control of a person, other than the vehicle's registered owner, under a program, or is otherwise under the control of a program:

Provisions Impacting the Owner and the Owner's Insurer.

An owner's insurance policy may not be canceled, rescinded, or non-renewed solely because an owner's vehicle has been in a program.

A private passenger motor vehicle may not be classified by an insurer as a commercial or a for-hire motor vehicle solely because the vehicle's registered owner allows the vehicle to be used for personal vehicle sharing if:

The provisions of the bill apply to automobile liability insurance policies issued or renewed on or after January 1, 2013.

Appropriation: None.

Fiscal Note: Requested on January 19, 2012.

Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.