SENATE BILL REPORT

ESSB 5499

BYSenate Committee on Financial Institutions & Insurance (originally sponsored by Senators von Reichbauer, Rasmussen, Sellar, Moore, Newhouse, Lee and Johnson)

Requiring motor vehicle liability insurance.

Senate Committee on Financial Institutions & Insurance

Senate Hearing Date(s):January 26, 1989; February 23, 1989

Majority Report:  That Substitute Senate Bill No. 5499 be substituted therefor, and the substitute bill do pass.

      Signed by Senators von Reichbauer, Chairman; Johnson, Vice Chairman; Fleming, McMullen, Moore, Rasmussen, Smitherman, West.

Senate Staff:Walt Corneille (786-7416)

                  April 13, 1989

House Committe on Financial Institutions & Insurance

AS PASSED SENATE, MARCH 15, 1989

BACKGROUND:

The financial responsibility law requires drivers and owners of motor vehicles to pay for damages caused by the negligent operation of a motor vehicle or face suspension of their driving privileges and possible suspension of the motor vehicle registration.  The operation of a motor vehicle without insurance is not prohibited.

If an automobile driver negligently causes an accident, the driver must arrange for payment of the damages and show future proof of financial responsibility by obtaining a vehicle liability insurance policy, self-insuring, posting a bond, or obtaining a certificate of deposit.

SUMMARY:

It is declared a privilege to operate a motor vehicle upon state highways.  The intent of the Legislature is to require all persons driving vehicles registered in this state to satisfy specified financial responsibility requirements.

It is not the intent of the Legislature to modify, amend or invalidate existing insurance contract terms, conditions, limitations or exclusions.

Every driver and registered owner of a motor vehicle must maintain financial responsibility as specified in the act.  Financial responsibility includes a motor vehicle liability policy in the amount of $25,000 per person and $50,000 per accident as well, as $10,000 for property damage, or a bond, certificate of deposit, or certificate of self-insurance as defined in the Financial Responsibility Act.  Vehicles owned by or driven by an agent of the United States, the state of Washington or a municipality or subdivision thereof are considered to have financial responsibility.  Antique or collectors' vehicles are exempt.

A person must provide evidence of financial responsibility when requested by a law enforcement officer.  Evidence of financial responsibility means the insurance or surety company's name and the number of the insurance policy or bond number, or the certificate of deposit number in the case of a self-insurer or depositor.

Drivers or owners of motor vehicles registered in another state requiring financial responsibility or insurance must comply with the laws of the state in which the vehicle is registered while driving in this state.

A violation of this act is a traffic infraction carrying a penalty of $250 per violation.  The court may reduce the penalty or require community service in lieu of the fine.

A person may appear in court personally or in lieu of a personal appearance may submit written evidence of financial responsibility by mail.  Upon receipt of evidence acceptable to the court of financial responsibility at the time of the infraction, further proceedings must be dismissed.

A driver or owner/occupant of a vehicle may not receive compensation for general damages greater than twice the medical bills resulting from an accident unless the driver or owner proves compliance with the act.  Special damages may be recovered in full regardless of compliance with the act.

A person who knowingly provides false evidence of financial responsibility to a law enforcement officer or the court is guilty of a misdemeanor punishable by a maximum fine of $500 and/or imprisonment of not more than 30 days.  The Department of Licensing (DOL) must suspend the driver's license of any person convicted of providing false evidence of financial responsibility for a period of one year.  After the suspension period, the DOL may not return the license until the licensee establishes proof of financial responsibility.

Appropriation:    none

Revenue:    none

Fiscal Note:      available

Effective Date:January 1, 1990

Senate Committee - Testified: Dennis Martin, WSTLA (pro); Basil Badley, AIA; Rick Jensen, WSP; Fred Eglin, PEMCO; Foster Cronyn, Washington Insurers, NAII (pro); Jean Leonard, State Farm (con); Peter P. Youngers, MADD State Chair (pro); Clark Sitze, Independent Insurance Agents of Washington (pro); Mike Kapphahn, Farmers Insurance (con)

HOUSE AMENDMENTS: 

Suspension of a driver's license for conviction of providing false evidence of financial responsibility is not required.  Evidence of financial responsibility is accomplished by presenting an insurance identification card which must be provided by an insurance company issuing or renewing a motor vehicle liability policy.  The Department of Licensing must adopt rules specifying the type, content and style of the card.

Motorcycles, mopeds, motor driven cycles and common carriers are exempt.

The insurance information contained on the insurance identification card must be included in an accident report.  The Department of Licensing must notify the public of the requirements of the act when issuing or renewing a vehicle registration. 

The Department of Licensing is required to compile records on uninsured motorists and must file a report with the Legislature after accumulating data for 12 months after the effective date of the act.