AN ACT Relating to no-fault automobile insurance; adding a new chapter to Title 48 RCW; prescribing penalties; and providing an effective date.

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

NEW SECTION. Sec. 1. (1) It is unlawful for the owner or registrant of an automobile required to be registered in this state to operate or permit the automobile to be operated on any public way in this state at any time after the effective date of this act unless security for the payment of basic economic loss benefits enumerated in section 3 of this act is in effect continuously throughout the registration period. This subsection shall not apply to an automobile which is one of six or more automobiles owned by one owner.

(2) Security for the payment of basic economic loss benefits, as provided in subsection (1) of this section, shall be provided by an insurance policy meeting the requirements of chapter 46.29 RCW, the financial responsibility laws of this state, which policy shall include those benefits enumerated in section 3 of this act.

(3) Every person who violates subsection (1) of this section shall be guilty of a gross misdemeanor.

NEW SECTION. Sec. 2. As used in this chapter:

(1) "Automobile" means (a) a private passenger motor vehicle, including a sedan, station wagon, or jeep-type automobile not used as a public livery conveyance for passengers, nor rented to others, or (b) a utility automobile, including a pickup, sedan delivery, or panel truck not primarily used in the occupation, profession, or business of the insured. A motorcycle or a motorcycle with a side car attached shall not be deemed to be an "automobile."

(2) "Income" includes, but is not limited to, salary, wages, tips, commissions, professional fees, and other earnings from work or tangible things of economic value produced in individually owned businesses or farms.

(3) "Income producer" means a person who at the time of the accident causing injury or death was in an occupational status where he or she was earning or producing income.

(4) "Relative" means a member of one's family who is a resident of one's household, and, in addition includes unemancipated children temporarily residing elsewhere while attending school.

(5) "Basic economic loss benefits" and "benefits prescribed in section 3 of this act" mean those benefits described in section 3 of this act and provided for in an automobile insurance policy qualifying under section 1(2) of this act.

(6) "Catastrophe economic loss benefits" and "benefits prescribed in section 4 of this act" mean those benefits described in section 4 of this act and provided for in an automobile insurance policy qualifying under section 1(2) of this act.

NEW SECTION. Sec. 3. No policy insuring against loss resulting from the liability imposed by law for bodily injury or death suffered by any person caused by accident and arising out of the ownership, maintenance, or use of an automobile registered or principally garaged in this state and insuring five or less private passenger automobiles shall be delivered or issued for delivery or renewed in this state on or after the effective date of this act unless coverage is provided therein or supplemental thereto affording minimum medical, hospital, and disability benefits as follows to the named insured and his or her relatives when injured in any motor vehicle accident, to other persons injured while occupying such automobile as guest passengers or while using it with the permission, expressed or implied, of the named insured, and to pedestrians struck by the automobile in accidents occurring within the state:

(1) Medical, hospital, and funeral benefits--Payment of all reasonable expenses arising from the accident and incurred within one year from the date thereof for necessary medical, surgical, x-ray, and dental services, including prosthetic devices, and necessary ambulance, hospital, professional nursing, and funeral services, up to an aggregate of ten thousand dollars per person. The amount related to funeral services shall not exceed two thousand five hundred dollars. Hospital room and board benefits may be limited to the regular daily semi-private room rates customarily charged by the institution in which the recipient of benefits is confined, except where the injured person requires special or intensive care.

(2) Disability benefits‑-(a) In the case of an income producer, payment of benefits equivalent to eighty-five percent of amounts actually lost by inability to work, subject to a maximum of five hundred dollars per week for fifty-two weeks. If the injured person is entitled to wages or salary or their equivalent under any program for continuation of such wages or salary or their equivalent, such benefits shall be limited to an amount which, together with any payments recoverable under such a program, will provide eighty-five percent of such person's average income for the year immediately preceding the accident. The policy may provide that benefits shall not commence for a specified waiting period not to exceed fourteen days from the date of the accident.

(b) In the event the injured person was not an income producer at the time of the accident, but did perform essential services, payment of benefits not exceeding twenty-five dollars per day for up to three hundred sixty-five days shall be made in reimbursement of expenses incurred for substitute help to perform such services provided by other than the injured person's relatives, the waiting period if any for such benefits not to exceed fourteen days from the date of the accident.

(c) Disability benefits under this subsection (2) shall be only for losses arising out of the accident and shall be payable only during the life of the injured person.

(d) The insurer providing disability benefits may require as a condition for receiving such benefits that the injured person furnish such insurer reasonable medical proof of such disability.

NEW SECTION. Sec. 4. Every insurer providing basic economic loss benefits as prescribed in section 3 of this act shall also make available, at the option of the person named in the policy as insured, catastrophe economic loss coverage for losses arising out of the accident providing for payment of benefits to the name insured and his or her relatives, in excess of the minimum benefits prescribed in section 3 of this act, which coverage shall pay medical, hospital, disability, and survivor's loss benefits as follows commencing upon the exhaustion of such minimum medical and hospital benefits or minimum disability benefits or both:

(1) Medical, hospital, and funeral benefits--Payment of all reasonable expenses arising from the accident for necessary medical, surgical, x-ray, and dental services, including prosthetic devices, and necessary ambulance, hospital, professional nursing, and funeral services. The benefits payable for funeral services shall not exceed two thousand five hundred dollars. Hospital room and board benefits may be limited to the regular daily semi-private room rates customarily charged by the institution in which the recipient of benefits is confined.

(2) Disability benefits--(a) In the case of an income producer, payment of benefits during his or her lifetime equivalent to eighty-five percent of income actually lost by inability to work, subject to a maximum limit of five hundred dollars per week for a period of two hundred sixty weeks.

(b) If the injured person was not an income producer at the time of the accident, but did perform essential services, payment of benefits not exceeding twenty-five dollars per day for up to one thousand eight hundred twenty-five days during his or her lifetime shall be made in reimbursement of expenses reasonably incurred for substitute help to perform such services by persons other than the injured person's relatives.

(c) The insurer providing disability benefits may require as a condition for receiving such benefits that the injured person furnish such insurer reasonable medical proof of such disability.

(3) Survivor's benefits--In the event the injured person dies within one year of the date of the accident, a survivor's benefit equal to eighty-five percent of the average weekly income the deceased earned during the fifty-two week period immediately preceding the accident, subject to a limit of five hundred dollars per week for a period of two hundred sixty weeks, to be paid to a surviving spouse, or, in the event there is no surviving spouse, to the surviving minor children if any. Payments to a surviving spouse may be terminated in the event such spouse dies or remarries. Payments to a child may be terminated in the event the child attains majority, marries, or becomes otherwise emancipated, or dies.

(4) Optional limitations--All benefits set forth in this section may be made subject to an aggregate limit payable on behalf of any one person as a result of any one accident of not less than one hundred thousand dollars, and to such additional internal sublimits as may be filed with and approved by the insurance commissioner.

NEW SECTION. Sec. 5. As respects expenses incurred as a result of injury to the named insured or his or her relatives under the benefits prescribed in section 3 of this act, and as respects all benefits prescribed in section 4 of this act, the named insured may elect to have the coverage written subject to such deductibles, waiting periods, sublimits, percentage reductions, excess provisions, and other reductions as may be offered by insurers in accordance with filings made by such insurers with the insurance commissioner.

NEW SECTION. Sec. 6. The benefits prescribed in sections 3 and 4 of this act shall be payable as follows:

(1) As to any person injured in an accident while occupying an automobile insured for such benefits, or injured as a pedestrian when struck by such an insured automobile, the benefits shall be payable by the insurer of the automobile.

(2) As to any person insured under a policy providing such benefits who is injured in an accident while occupying or being struck by a motor vehicle not insured for such benefits under another policy, the benefits shall be payable by the insurer whose policy does contain such benefits. Such benefits shall be reduced to the extent of any automobile medical or disability benefits coverage applicable to the automobile under such other policy if any.

NEW SECTION. Sec. 7. (1) Benefits prescribed in sections 3 and 4 of this act shall be deducted from any recovery received by the injured person or on behalf of the deceased person under uninsured motorist coverage.

(2) Benefits recovered or recoverable under the worker's compensation laws of any state or province or the federal or other government shall be deducted from benefits provided by sections 3 and 4 of this act, and if not deducted but recovered subsequent to payment of benefits provided by sections 3 and 4 of this act shall be held in trust for the benefit of the insurer who has paid such benefits.

(3) The obligation to pay benefits prescribed in sections 3 and 4 of this act shall not apply to any direct or indirect loss or interest of, or for service or benefits provided or furnished by, the United States of America or any of its agencies coincident to a contract of employment or of military enlistment, duty, or service.

NEW SECTION. Sec. 8. (1) The insurer may exclude benefits prescribed in sections 3 and 4 of this act to any injured person otherwise covered where such person's conduct contributed to the injury in any of the following ways:

(a) Intentionally causing injury to himself or herself;

(b) Operating a motor vehicle while under the influence of intoxicating liquor or drug;

(d) Operating a motor vehicle upon a bet or wager or in a race;

(e) While seeking to elude lawful apprehension or arrest by a police officer;

(f) While operating or riding in a vehicle known to him or her to be stolen;

(g) While engaged in the commission of a felony.

(2) The insurer may provide such other exclusions as may be approved by the insurance commissioner as consistent with public policy.

NEW SECTION. Sec. 9. As soon as is practicable the injured person or someone acting in his or her behalf shall give the insurer written proof of loss, under oath if required by the insurer.

NEW SECTION. Sec. 10. The policy providing benefits prescribed in sections 3 and 4 of this act may provide that in any instance where a lapse occurs in the period of disability or in the medical treatment of an injured person who has received benefits under such coverage or coverages and such person subsequently claims additional benefits based upon an alleged recurrence of the injury for which the original claim for benefits was made, the insurer may require reasonable medical proof of such alleged recurrence. In no event shall the aggregate benefits payable to any person exceed the maximum limits prescribed under this chapter. Such coverages may contain a provision terminating eligibility for benefits after a prescribed period of lapse of disability and medical treatment, which period shall not be less than one year.

NEW SECTION. Sec. 11. Insurers authorized to issue policies providing benefits according to sections 3 and 4 of this act in this state are directed to organize and maintain an assigned claims plan to provide that any resident of the state, other than the owner or registrant of an automobile not insured by a policy providing basic economic loss benefits or such owner's or registrant's relatives, who suffers loss or expense as a result of an injury arising out of the ownership, operation, maintenance, or use of a motor vehicle in this state, may obtain basic economic loss benefits as prescribed in section 3 of this act through said plan in any case where no basic economic loss benefits are otherwise available to such a person. Said plan shall contain such rules for operation and for the assessment of costs as shall be approved by the insurance commissioner. Any claim brought through said plan shall be assigned to an insurer in accordance with the approved regulations of operation and that insurer, after such assignment, shall have the same rights and obligations it would have if prior to such assignment, it had issued a policy providing basic economic loss benefits applicable to the loss of expenses incurred. Any person seeking access to such plan hereunder shall be subject to such exclusions and rules of coverage and shall have such rights and obligations as he or she would have were a policy providing basic economic loss benefits issued to him or her.

NEW SECTION. Sec. 12. All payments of benefits prescribed in sections 3 and 4 of this act shall be made periodically on a monthly basic as claims therefor arise and as satisfactory proof thereof is received by the insurer, subject to the time limitation on original proof of loss and recurrences contained in sections 9 and 10 of this act.

NEW SECTION. Sec. 13. Payments of benefits prescribed in sections 3 and 4 of this act shall be overdue if not paid within thirty days after the end of the month in which the insurer shall have been supplied satisfactory proof thereof. In the event the insurer fails to pay such benefits when due, the person entitled to such benefits may bring an action in contract to recover them. If the insurer is required in such action to pay any overdue benefits, the insurer may, in addition to the benefits under the policy, be required to pay reasonable attorneys' fees incurred by the other party.

NEW SECTION. Sec. 14. The existence of a potential cause of action in tort by any recipient of the benefits prescribed in sections 3 and 4 of this act does not relieve the insurer of its obligation promptly to pay such benefits. However, if prior to timely payment by the insurer of such benefits, payment in whole or in part of his or her loss is received from a third person against whom claim is made for such loss, or from the agent or insurers of such third person, either by way of advance payment or settlement of the potential liability of such third person, the recipient must disclose such fact, and may not collect benefits hereunder to the extent that such benefits would produce a duplication of payment or reimbursement of the same loss. In the event of any duplication of payment or reimbursement of the same loss, and to the extent of the amount involved, the insurer may deduct that amount from any present or future benefits to which the recipient is or may be entitled in addition to such other remedies as exist for recovery at law. It shall be conclusively presumed that any such advance payment or settlement from such third party includes payment of such medical and hospital expenses and loss of income as may have been incurred by the injured person up to the time such payment or settlement is made.

NEW SECTION. Sec. 15. If any person receiving or entitled to receive benefits under sections 3 and 4 of this act files an action for damages for bodily injury, sickness, disease, or death arising out of the same motor vehicle accident in any court in this state, such benefits must be disclosed to the court, and the value of such benefits must be deducted from any award recovered by such person in such proceeding prior to the entry of a judgment.

NEW SECTION. Sec. 16. (1) Except as otherwise provided in this section, where an insurer has paid benefits prescribed under sections 3 and 4 of this act to an injured person, or has paid benefits under section 11 of this act, the insurer paying such benefits is, to the extent of such payments, subrogated to any right of action for damages by the injured person against the alleged tort feasor. The right of action for damages to which such insurer is subrogated shall not be reduced or otherwise affected by the amounts to which a judgment obtained by the injured would have been reduced by operation of section 15 of this act.

(2) As a condition of doing business in this state or renewing its certificate of authority after the effective date of this act, every insurer licensed to write vehicle insurance in this state is deemed to have agreed that where its insured is or would be held legally liable for damages or injuries sustained by any person to whom the benefits prescribed in sections 3 and 4 of this act have been paid by another insurer, it will reimburse such other insurer to the extent of such benefits, but not in excess of the amount of damages so recoverable for the types of loss covered by such benefits, or in excess of the limits of its liability under its policy; and that the issue of liability for such reimbursement and the amount thereof must be decided by mandatory, binding intercompany arbitration procedures approved by the insurance commissioner. In any event in which the insurer providing such benefits also has provided coverage to the same policyholder for collision or upset arising out of the same occurrence, such insurer shall also submit the issue of recovery of any payments thereunder to the same arbitration proceedings as hereinabove provided.

(3) Any decision in the arbitration proceedings is privileged and is not admissible in any action at law or in equity by any party.

NEW SECTION. Sec. 17. Where the injured party or the insurer or both have incurred legal expenses in recovering payments which benefit both, whether incurred in any action for damages or otherwise, there shall be an equitable apportionment of such expenses.

NEW SECTION. Sec. 18. Any person receiving the benefits prescribed in sections 3 and 4 of this act shall participate and cooperate as required under the coverage in any and all actions instituted by or on behalf of the insurer paying the benefits, and the insurer may require in the furnishing of proof of loss that such person shall so participate and cooperate as consideration for the payment of such benefits.

NEW SECTION. Sec. 19. (1) Notwithstanding any other law, in any action by or on behalf of a covered person against another covered person for personal injuries arising out of negligence in the use or operation of a motor vehicle in this state, there shall be no right of recovery for noneconomic loss.

(2) The limitations prescribed in subsection (1) of this section shall not apply in cases of death, dismemberment, permanent total or partial disability, and permanent serious disfigurement, which issues, where raised, shall be separately determined by the trier of fact.

NEW SECTION. Sec. 20. In any action in tort brought as a result of bodily injury, sickness, or disease, caused by accident occurring on or after the effective date of this act arising out of the operation, ownership, maintenance, or use of a motor vehicle within this state:

(1) Damages awarded for loss of past income and reasonably anticipated future income due to disability sustained by the plaintiff as a result of the injuries giving rise to the action shall be computed net of any income taxes which would have been payable on such past income and net of a reasonable set-off for income taxes prospectively payable on such future income, which set-off, in the absence of proof supporting a different set-off for such income taxes, shall be equivalent to fifteen percent of the total amount of such lost income; and

(2) The defendant shall be entitled to an instruction which reasonably and fairly states the law as respects income taxation of any damages that may be awarded to the plaintiff.

NEW SECTION. Sec. 21. Any person injured in a motor vehicle accident who claims damages therefor from another party or benefits therefor under an insurance policy shall upon request of the party or insurer from whom recovery is sought submit to physical examination by a physician or physicians selected by such party or insurer as may reasonably be required and shall do all things reasonably necessary to enable such party or insurer to obtain medical reports and other needed information to assist in determining the nature and extent of the claimant's injuries and the medical treatment received by him or her. Every physician, hospital, clinic, or other medical institution shall, if requested to do so by the party or insurer against whom the claim has been made, furnish forthwith a written report of the history, condition, treatment, and dates and costs of any treatment of the injured person, and produce forthwith and permit the inspection and copying of his or her or its records regarding any history, condition, treatment, and dates and costs of treatment. The person requesting such records shall pay all reasonable costs connected therewith.

NEW SECTION. Sec. 22. Every employer shall, if a request is made by an insurer providing benefits prescribed in sections 3 and 4 of this act and against whom a claim has been made, furnish forthwith, in a form approved by the insurance commissioner, a sworn statement of the income since the time of the bodily injury and for a reasonable period before the injury, of the person upon whose injury the claim is based.

NEW SECTION. Sec. 23. In any action on which a person or an insurer on behalf of its insured has made any payments to or on behalf of any plaintiff prior to trial, said payments shall not be construed as an admission of liability by such person, or such insurer or its insured, in any action brought to recover for personal injuries to said plaintiff, or for the wrongful death of another, or for property damage or destruction. In the event, however, that such action results in a verdict in favor of the plaintiff, the defendant shall be allowed to introduce evidence of such payments after the verdict has been rendered and the court shall then reduce the amount awarded to the plaintiff by the amount of payments made prior to trial. No such advance payment made by an insurer on behalf of the insured shall be construed to be in lieu of or in addition to the limits of liability of said insurer under any existing liability of said insurer under any existing policy of insurance. Such amounts paid in advance shall be deemed to have been made pursuant to the limits of said policy and shall be credited to the insurer's obligation to the insured arising from such policy and shall be deducted therefrom.

NEW SECTION. Sec. 24. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION. Sec. 25. This act shall take effect January 1, 1990.

NEW SECTION. Sec. 26. Sections 1 through 23 of this act shall constitute a new chapter in Title 48 RCW.