SENATE BILL REPORT

SHB 511

BYHouse Committee on Financial Institutions & Insurance (originally sponsored by Representatives 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

Senate Committee on Financial Institutions

Senate Hearing Date(s):April 2, 1987

Senate Staff:Walt Corneille (786-7452)

AS OF APRIL 1, 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 $10,000 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:

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 $10,000 in benefits for loss of income, and at least $5,000 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.

Fiscal Note:      none requested