AN ACT Relating to compulsory motor vehicle insurance; and adding a new chapter to Title 48 RCW.

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

NEW SECTION. Sec. 1. No owner of a motor vehicle required to be registered in this state shall operate or authorize any other person to operate the vehicle unless the owner has insurance on the motor vehicle providing either the fault insurance alternative or the no-fault insurance alternative. The choice between such coverages is applicable to every motor vehicle of the owner. In the event an owner of more than one vehicle chooses different alternatives, the earliest choice governs and, in the event of simultaneous choices, the choice of the fault insurance alternative governs.

FAULT INSURANCE ALTERNATIVE

NEW SECTION. Sec. 2. (1) Fault insurance covers each person who is a named insured under the motor vehicle policy or the spouse, other relative, or dependent residing in the same household of a named insured, in addition to anyone operating the vehicle with permission of the owner, for legal liability for bodily injury, including death, arising out of ownership, maintenance, or use of the vehicle to the limit, exclusive of interest and costs, of at least the limits prescribed by the financial responsibility statutes under chapter 46.29 RCW.

(2) Connector insurance provides compensation applicable under the fault insurance alternative to those listed under subsection (3) of this section if injured in a motor vehicle accident as a consequence of the fault of another person who is uninsured or insured under the no-fault insurance alternative.

(3) The connector coverage provided under subsection (2) of this section is applicable to:

(a) Each person who is a named insured under a policy issued under the fault insurance alternative;

(b) Each person who is the spouse, other relative, or dependent residing in the same household of a named insured under a policy issued under the fault insurance alternative unless that person is covered under a policy issued under the no-fault insurance alternative; and

(c) Each person who is an occupant of a motor vehicle insured under an insurance policy issued under the fault insurance alternative other than a person who is covered under a policy issued under the no-fault insurance alternative.

(4) (a) In case of injury to the driver or other occupant of a motor vehicle when the accident causing the injury occurs while the vehicle is being used in the business of transporting persons or property, the connector coverage for payment of benefits is the coverage applicable to the vehicle or, if none, the coverage under which the injured person is insured by his, her, or another's choice.

(b) In case of injury to an employee, his or her spouse, or other relative or dependent residing in the same household when the accident causing the injury occurs while the injured person is driving or occupying a motor vehicle furnished by the employer, the connector coverage for payment of benefits is the coverage applicable to the vehicle or, if none, the coverage under which the injured person is insured.

(c) In all other cases, the connector coverage for payment is the coverage under which the injured person is insured by his, her, or another's choice or, if none, the coverage applicable to the vehicle in or by which he or she is injured.

(5) The insurance coverages provided under this section are subject to such terms, conditions, and exclusions as are approved by the insurance commissioner.

(6) Each insurer authorized to sell liability insurance in this state shall offer to each person who chooses the fault insurance alternative optional coverage for the items listed under the no-fault insurance alternative, excepting the provisions of section 3(13) of this act.

NO-FAULT INSURANCE ALTERNATIVE

NEW SECTION. Sec. 3. (1) No-fault insurance provides compensation to persons injured in a motor vehicle accident within the United States, its territories or possessions, and Canada for reasonable and necessary expenses incurred within ten years after the accident as a consequence of the accident, to at least the limits under (b) of this subsection.

(a) Compensation shall be provided for reasonable charges for reasonably needed medical hospital, dental, surgical, medicine, x-ray, ambulance, emergency medical, rehabilitation, nursing, and funeral services. Compensation for funeral services, including all customary charges and the cost of a burial plot for one person, is not to exceed the sum of five thousand dollars. Compensation includes reasonable expenses for any nonmedical remedial care and treatment rendered in accordance with a recognized religious method of healing. Compensation does not include any charge for a room in any facility engaged in providing any such service to the extent that the charge is in excess of a reasonable and customary charge for a semiprivate room, unless a private room is medically required.

(b) Subject to a maximum of four thousand dollars per month in compensation for lost earnings, compensation shall be provided for eighty percent of lost earnings, net after taxes, sustained by each injured person during the first thirty-six months after a motor vehicle accident and, subject to a maximum of two thousand dollars per month, forty percent of the lost earnings so sustained during the subsequent thirty-six months after such an accident. Lost earnings means lost earnings, net after taxes and expenses, of a self-employed person.

(c) Compensation shall be provided for reasonable amounts required to pay for services which would have been performed by the injured person personally had that person not been injured in a motor vehicle accident, up to twenty-five dollars per day for the first thirty-six months after such an accident.

(d) (i) Expenses shall be provided for rehabilitation services including the cost of a procedure or treatment for rehabilitation or a course of rehabilitative occupational training if the procedure, treatment, or training is reasonable and appropriate for the particular case, its cost is reasonable in relation to its probable rehabilitative effects, and it is likely to contribute substantially to restoring the injured person's earning capacity. The costs of equipment, facilities, transportation, or other services necessary to rehabilitation services are also recoverable. This subsection applies only to services performed by a provider which is licensed or approved by an appropriate governmental or professional agency or entity as qualified to provide such services.

(ii) The insurer shall notify an injured person that if he or she undertakes a procedure or treatment for rehabilitation or a course of rehabilitative occupational training, other than medical rehabilitation procedure or treatment, he or she shall notify the insurer within sixty days after such a rehabilitation expense exceeding one thousand dollars has been incurred, unless the insurer knows or has reason to know of the undertaking. Then if the injured person does not give the required notice within the prescribed time, the insurer is responsible only for one thousand dollars or the expense incurred after the notice is actually given and within sixty days before the notice, whichever is greater, unless failure to give timely notice is the result of excusable neglect.

(iii) If the injured person notifies the insurer of a proposed specified procedure or treatment for rehabilitation, or a proposed specified course of rehabilitative occupational training, and the insurer does not promptly thereafter accept responsibility for its cost, the injured person may move the court in an action to adjudicate his or her claim, or, if no action is pending bring an action in superior court, for a determination that the insurer is responsible for its cost. An insurer may move the court in an action to adjudicate the injured person's claim, or, if no action is pending, bring an action in the superior court, for a determination that it is not responsible for the cost of a procedure, treatment, or course of treatment which the injured has undertaken or proposes to undertake. A determination by the court that the insurer is not responsible for the cost of a procedure, treatment, or course of training is not res judicata as to the propriety of any other proposal or the injured person's right to other benefits. This subsection does not preclude an action by the insurer or the injured person for declaratory relief under any other law of this state, nor an action by the injured person to recover other benefits payable under this section.

(iv) If an injured person unreasonably refuses to accept a rehabilitative procedure, treatment, or course of occupational training, an insurer may move the court, in an action to adjudicate the injured person's claim, or if no action is pending, may bring an action in the superior court, for a determination that future benefits will be reduced or terminated to limit recovery of benefits to an amount equal to benefits that in reasonable probability would be due if the injured person had submitted to the procedure, treatment, or training, and for other reasonable orders. In determining whether an injured person has reasonable grounds for refusal to undertake the procedure, treatment, or training, the court shall consider all relevant factors, including the risks to the injured person, the extent of the probable benefit, the place where the procedure, treatment, or training is offered, the extent to which the procedure, treatment, or training is recognized as standard and customary, and whether the imposition of sanctions because of the person's refusal would abridge his or her right to the free exercise of religion.

(2) The term injury includes death and the term injured person includes the personal representative of an estate.

(3) Except as provided in subsection (4) of this section, no-fault insurance benefits are payable without regard to fault but are not payable for any noneconomic loss which includes, but is not necessarily limited to, pain, suffering, inconvenience, physical impairment, grief, and other nonpecuniary damages recoverable under chapter 4.56 RCW.

(4) A person intentionally causing or attempting to cause injury to himself, herself, or another person is disqualified from no-fault benefits for injury arising from his or her acts, including benefits otherwise due him or her as a survivor. If a person dies as a result of intentionally causing or attempting to cause injury to himself or herself, his or her survivors are not entitled to no-fault benefits for loss arising from injury leading to his or her death. A person intentionally causes or attempts to cause injury if he or she acts or fails to act for the purpose of causing injury or with knowledge that injury is substantially certain to follow. A person does not intentionally cause or attempt to cause injury (a) merely because his or her act or failure to act is intentional or done with the realization that it creates a grave risk of causing injury or (b) if the act or omission causing the injury is for the purpose of averting bodily harm to himself, herself, or another person.

(5) (a) The minimum insurance coverage which satisfies the requirements of the no-fault insurance alternative is a limit for the total of all payments which must be made pursuant to that alternative of one hundred thousand dollars for every injured person so covered.

(b) Each insurer authorized to sell no-fault insurance may offer no-fault coverage within monetary or territorial limits in excess of required no-fault coverages. The insurance commissioner may adopt rules that such excess no-fault coverages in amounts specified by the insurance commissioner be offered by insurers writing no-fault insurance.

(6) The coverage provided under the no-fault insurance alternative is applicable to:

(a) Each person who is a named insured under a motor vehicle liability insurance policy issued under the no-fault insurance alternative; and

(b) Each person who is the spouse, other relative, or dependent residing in the same household of a named insured under a policy issued under the no-fault insurance alternative, unless that person is covered under a policy issued under the fault insurance alternative. Such a spouse, relative, or dependent who is sixteen years old or older is under a duty to file a written notification with the company issuing the motor vehicle liability insurance policy within thirty days of the issuance of the policy that he or she elects to be covered under a coverage of the type specified under the fault insurance alternative in order to be so covered. Subject to subsection (14) of this section, a company issuing a motor vehicle liability insurance policy in this state shall provide forms, approved by the insurance commissioner, to its named insureds for the filing of the elections. In addition, such a company shall provide coverage of the type specified under the fault insurance alternative for those making such an election.

(7) (a) In case of injury to the driver or other occupant of a motor vehicle, if the accident causing the injury occurs while the vehicle is being used in the business of transporting persons or property, the coverage for payment of no-fault benefits is the coverage applicable to the vehicle or, if none, the coverage under which the injured person is insured by his, her, or another's choice.

(b) In case of injury to an employee, his or her spouse, or other relative or dependent residing in the same household when the accident causing the injury occurs while the injured person is driving or occupying a motor vehicle furnished by the employer, the coverage for payment of no-fault benefits is the coverage applicable to the vehicle or, if none, the coverage under which the injured person is insured by his, her, or another's choice.

(c) In all other cases, the coverage for payment of no-fault benefits is the coverage under which the injured person is insured by his, her, or another's choice or, if none, the coverage applicable to the vehicle in or by which he or she is injured.

(8) The owner of a motor vehicle may elect, but cannot be required, to have the coverage described under the no-fault insurance alternative written subject to deductibles, exclusions, waiting periods, sublimits, percentage reductions, excess provisions, and similar reductions approved by the insurance commissioner. Such elections apply only to benefits payable to the person named in the policy, his or her spouse, other relative, or dependent residing in the same household.

(9) (a) For purposes of this subsection, loss accrues not when injury occurs, but as medical expense, work loss, replacement services loss, or rehabilitation services expense is incurred.

(b) Expenses under this subsection shall be submitted to the insurer as promptly as practical but, in no event more than two years after the loss accrues.

(c) Payment of expenses submitted under (b) of this subsection shall be made monthly as loss accrues. Benefits are overdue if not paid within thirty days after the insurer receives reasonable proof of the fact and amount of the loss realized, unless the insurer elects to accumulate claims for periods not exceeding thirty-one days and pays them within fifteen days after the period of accumulation. If reasonable proof is supplied as to only part of a claim, and the part totals one hundred dollars or more, the part is overdue if not paid within the time provided by this subsection.

(d) Overdue payments bear interest at the rate of eighteen percent per annum.

(e) Benefits for medical expense and rehabilitation services expense may, at the election of the insurer, be paid directly to the persons supplying such services to the claimant.

(f) A claim for expenses under this subsection shall be paid without deduction for benefits payable by collateral sources, if these benefits have not been paid to the claimant before the benefits are overdue or the claim is paid. The insurer is entitled to reimbursement from the person obligated to make the payments or from the claimant who actually receives the payments.

(g) An insurer may bring an action to recover benefits which are not payable, but are in fact paid, because of an intentional misrepresentation of a material fact, upon which the insurer relies, by the insured or by a person providing medical or rehabilitative services. When medical or rehabilitation services are at issue the action may be brought only against the person providing the services, unless the insured has intentionally misrepresented the facts or knew of the misrepresentation. An insurer may offset amounts it is entitled to recover from the insured under this subsection against any benefits otherwise due.

(h) An insurer who rejects a claim for benefits shall give to the claimant prompt written notice of the rejection, specifying the reason.

(10) The coverage provided under the no-fault insurance alternative is applicable to accidents involving a motor vehicle in any state of the United States, its territories or possessions, or Canada.

(11) The coverage provided under the no-fault insurance alternative includes coverage for payment (a) up to at least fifteen thousand dollars for damage to property owned by any person as a result of a motor vehicle accident if the damage was caused by the fault of the named insured or one for whom he or she is vicariously liable; (b) up to at least fifteen thousand dollars for bodily injury to or death of any person in a motor vehicle accident occurring outside this state in any state of the United States, its territories or possessions, or in Canada, if the injury or death was caused by the fault of the named insured or one for whom he or she is vicariously liable; and (c) up to at least fifteen thousand dollars for bodily injury to or death of any person in a motor vehicle accident occurring within this state if the victim is (i) not covered by either the fault or no-fault alternative, or (ii) otherwise eligible to claim liability for bodily injury if the injury or death was caused by the fault of a no-fault insured or one for whom he or she is vicariously liable. The minimum limits for bodily injury in this subsection are further subject to a limit of thirty thousand dollars for all damages arising out of one accident.

(12) (a) Whenever a person who receives or is entitled to receive benefits under the no-fault insurance alternative has a claim or cause of action against any other person for breach of an obligation or duty causing injury, the insurer of the applicable no-fault benefits is subrogated to the rights of the claimant and has a claim for relief or cause of action, separate from that of the claimant, if (i) damages so recovered equal or exceed the no-fault insurance alternative are recoverable, and (ii) the insurer of the applicable no-fault benefits has paid or become obligated to pay accrued or future no-fault insurance benefits.

(b) An insurer of applicable no-fault insurance has a right of indemnity against a person who has converted a motor vehicle involved in an accident, or a person who has intentionally caused injury to another person, for no-fault insurance benefits paid to other persons for the injury caused by the conduct of that person, for the cost of processing a claim for those benefits, and for reasonable attorneys' fees and other expenses for enforcing the right of indemnity. For purposes of this subsection, a person is not a converter if he or she uses the motor vehicle in the good-faith belief he or she is legally entitled to do so.

(13) Any person eligible at the time of an accident for benefits under the no-fault insurance alternative may neither claim against, nor be claimed against by, any other person insured, or required to be insured, under either the fault or no-fault insurance alternative, including any other person for whom such insured is vicariously liable, for liability based on fault for an accident occurring within this state arising out of the ownership, maintenance, or use of a motor vehicle, except as provided in subsection (11) of this section, or for harm intentionally caused. For the purposes of this subsection, intentionally caused harm is defined under subsection (4) of this section.

(14) (a) Each insurer prior to issuance or renewal of a motor vehicle liability insurance policy, shall notify in writing each applicant and each named insured of the availability of the two alternatives of fault insurance and no-fault insurance, pursuant to the terms of regulations issued by the insurance commissioner setting forth the written terms of the document which a party elects, and anyone he or she has a right to choose to the fault or no-fault insurance alternative. Any party signing, or otherwise bound by, a document containing such terms is bound by such election and is precluded from claiming liability of any party based on being inadequately informed in making the election between the fault or no-fault alternatives.

(b) If any owner of a motor vehicle required to be registered in this state fails to indicate, prior to a motor vehicle accident, whether the owner wishes to maintain the fault insurance alternative or the no-fault insurance alternative, the owner, and those he or she is empowered to bind by his or her choice, are conclusively presumed to have chosen the fault alternative.

(15) (a) Notwithstanding any contrary provision in it, every contract of liability insurance for injury, wherever issued, covering ownership, maintenance, or use of a motor vehicle includes coverage such that a person eligible for no-fault benefits under this chapter can neither sue nor be sued in accordance with the provisions of this chapter, and persons not eligible for no-fault benefits who would otherwise have a claim against a person eligible for no-fault benefits can claim against connector coverage in accordance with the provisions of this chapter.

(b) An insurer authorized to transact or transacting business in this state may not exclude in any contract of liability insurance for injury, wherever issued, covering ownership, maintenance, or use of a motor vehicle, provisions implementing the terms in (a) of this subsection.

(16) An insurer of the no-fault alternative may require an injured person submitting a claim to submit to any reasonable examination or reexamination, at times and places convenient to the injured person, by medical experts selected by the injured person from a list provided by the state medical society, on such terms and conditions as are approved by the insurance commissioner. The cost of any such examination shall be paid by the insurer, and a copy of a written report of any such examination or reexamination shall, upon request, be furnished to the injured person.

NEW SECTION. Sec. 4. The insurance commissioner may adopt rules to provide effective administration of this chapter which are consistent with its purposes and fair and equitable.

NEW SECTION. Sec. 5. Sections 1 through 4 of this act shall constitute a new chapter in Title 48 RCW.