S-4646               _______________________________________________

 

                                                   SENATE BILL NO. 6877

                        _______________________________________________

 

State of Washington                               51st Legislature                              1990 Regular Session

 

By Senators Hayner, Johnson, Sellar, Cantu and Bluechel

 

 

Read first time 2/1/90 and referred to Committee on  Financial Institutions & Insurance.

 

 


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 does not apply to an automobile that 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 is guilty of a gross misdemeanor.

 

          NEW SECTION.  Sec. 2.     The definitions set forth in this section apply throughout 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 vehicle, 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 is not 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 property damage, 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 fewer private passenger automobiles may be delivered or issued for delivery or renewed in this state after December 31, 1990, unless coverage is provided in the policy or in a supplemental policy affording minimum medical, hospital, disability, and property damage 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 the automobile as guest passengers or while using it with the permission, expressed or implied, of the named insured, and to pedestrians or property 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 of the accident for necessary medical, surgical, x-ray, and dental services, including prosthetic devices, and necessary ambulance, hospital, rehabilitation, professional nursing, and funeral services.  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 one hundred four weeks.  If the injured person is entitled to wages or salary or their equivalent under a program for continuation of the wages or salary or their equivalent, the benefits are limited to an amount that, together with any payments recoverable under such a program, will provide eighty-five percent of the person's average income for the year immediately before the accident.  The policy may provide that benefits will not commence for a specified waiting period not to exceed fourteen days from the date of the accident.

          (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 seven hundred thirty days shall be made in reimbursement of expenses incurred for substitute help to perform those services provided by someone other than the injured person's relatives.  The waiting period, if any, for such benefits shall not exceed fourteen days from the date of the accident.

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

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

          (3) Property damage benefits--Payment for damage to tangible property consisting of physical injury to or destruction of the property and loss of use of the property so injured or destroyed.

          (a) Damage to tangible property is accidental, as to a person claiming property damage insurance benefits, unless it is suffered or caused intentionally by the claimant.  Even though a person knows that damage to tangible property is substantially certain to be caused by his or her act or omission, the person does not cause or suffer the damage intentionally if the person acts or refrains from acting for the purpose of averting injury to any person, including himself or herself, or for the purpose of averting damage to tangible property.

          (b) Property damage insurance benefits consist of the lesser of reasonable repair costs or replacement costs less depreciation and, where applicable, the value of loss of use.  However, property damage insurance benefits paid under one policy for damage to all tangible property arising from one accident shall not exceed one million dollars.

 

          NEW SECTION.  Sec. 4.     Every insurer providing basic economic loss benefits as prescribed in section 3(1) and (2) of this act shall also make available, at the option of the person named in the policy as insured, catastrophic economic loss coverage for losses arising from the accident providing for payment of benefits to the named insured and his or her relatives, in excess of the minimum benefits prescribed in section 3(1) and (2) of this act, which coverage shall pay disability and survivor's loss benefits as follows commencing upon the exhaustion of the minimum disability benefits:

          (1) 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 the services by persons other than the injured person's relatives.

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

          (2) Survivor's benefits--If 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 before 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, if there is no surviving spouse, to the surviving minor children, if any.  Payments to a surviving spouse may be terminated if the spouse dies or remarries.  Payments to a child may be terminated if the child attains majority, marries, or becomes otherwise emancipated, or dies.

          (3) 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.     For 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 for 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 the insurers with the insurance commissioner.

 

          NEW SECTION.  Sec. 6.     (1) Damage to the following kinds of property is excluded from property damage insurance benefits:

          (a) Vehicles and their contents, including trailers, operated or designed for operation upon a public highway by power other than muscular power, unless the vehicle is parked in a manner as not to cause unreasonable risk of the damage that occurred;

          (b) Property owned by a person named in a property damage insurance policy, the person's spouse or a relative of either domiciled in the same household, if the person named, the person's spouse, or the relative was the owner, registrant, or operator of a vehicle involved in the motor vehicle accident out of which the property damage arose.

          (2) Property damage insurance benefits are not payable for property damage arising from motor vehicle accidents occurring outside the state.

          (3) Property damage insurance benefits are not payable for property damage to utility transmission lines, wires, or cables arising from the failure of a municipality, utility company, or cable television company to comply with the requirements of Title 80 RCW.

 

          NEW SECTION.  Sec. 7.     A person suffering accidental property damage shall claim property damage insurance benefits from insurers in the following order of priority:  Insurers of owners or registrants of vehicles involved in the accident, and insurers of operators of vehicles involved in the accident.

 

          NEW SECTION.  Sec. 8.     Residual liability insurance shall cover bodily injury and property damage that occurs within the United States, its territories and possessions, or in Canada.  This insurance shall afford coverage equivalent to that required as evidence of automobile liability insurance under the financial responsibility laws of the place in which the injury or damage occurs.

 

          NEW SECTION.  Sec. 9.     The benefits prescribed in sections 3 and 4 of this act are payable as follows:

          (1) For a 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 are payable by the insurer of the automobile.

          (2) For a 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 are payable by the insurer whose policy does contain such benefits.  The benefits shall be reduced to the extent of any automobile medical or disability benefits coverage applicable to the automobile under the other policy, if any.

 

          NEW SECTION.  Sec. 10.    (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 are recovered after 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 the benefits.

          (3) The obligation to pay benefits prescribed in sections 3 and 4 of this act does not apply to a 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. 11.    (1) The insurer may exclude benefits prescribed in sections 3 and 4 of this act to an injured person otherwise covered where the 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;

          (c) Operating a motor vehicle after suspension or revocation of his or her driver's license;

          (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 law enforcement 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. 12.    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. 13.    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 the coverage or coverages and the 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 the alleged recurrence.  In no event may the aggregate benefits payable to any person exceed the maximum limits prescribed under this chapter.  The 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. 14.    Insurers authorized to issue policies providing benefits according to sections 3 and 4 of this act in this state shall 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 the 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 the plan in any case where no basic economic loss benefits are otherwise available to such a person.  The plan shall contain such rules for operation and for the assessment of costs as are approved by the insurance commissioner.  A claim brought through the plan shall be assigned to an insurer in accordance with the approved rules of operation, and that insurer, after the assignment, has the same rights and obligations it would have if before the assignment it had issued a policy providing basic economic loss benefits applicable to the loss of expenses incurred.  A person seeking access to such a plan under this section is subject to such exclusions and rules of coverage and has such rights and obligations as he or she would have if a policy providing basic economic loss benefits had been issued to him or her.

 

          NEW SECTION.  Sec. 15.    All payments of benefits prescribed in sections 3 and 4 of this act shall be made periodically on a monthly basis as claims for them arise and as satisfactory proof of them is received by the insurer, subject to the time limitation on original proof of loss and recurrences contained in sections 12 and 13 of this act.

 

          NEW SECTION.  Sec. 16.    Payments of benefits prescribed in sections 3 and 4 of this act are overdue if not paid within thirty days after the end of the month in which the insurer was supplied satisfactory proof of the claim.  If the insurer fails to pay the benefits when due, the person entitled to the benefits may bring an action in contract to recover them.  If the insurer is required in that action to pay any overdue benefits, the court may, in addition to the benefits under the policy, require the insurer to pay reasonable attorneys' fees incurred by the other party.

 

          NEW SECTION.  Sec. 17.    The existence of a potential cause of action in tort by a recipient of the benefits prescribed in sections 3 and 4 of this act does not relieve the insurer of its obligation promptly to pay the benefits.  However, if before timely payment by the insurer of the benefits, payment in whole or in part of his or her loss is received from a third person against whom claim is made for the loss, or from the agent or insurers of the third person, either by way of advance payment or settlement of the potential liability of the third person, the recipient shall disclose that fact, and may not collect benefits under this chapter to the extent that the benefits would produce a duplication of payment or reimbursement of the same loss.  In the event of a 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 that exist for recovery at law.  It is conclusively presumed that such an advance payment or settlement from the third party includes payment of such medical and hospital expenses and loss of income that may have been incurred by the injured person up to the time the payment or settlement is made.

 

          NEW SECTION.  Sec. 18.    If a person receiving or entitled to receive benefits under sections 3 and 4 of this act files an action for damages for property damage, bodily injury, sickness, disease, or death arising out of the same motor vehicle accident in a court in this state, the benefits must be disclosed to the court, and the value of the benefits must be deducted from any award recovered by the person in the proceeding before the entry of a judgment.

 

          NEW SECTION.  Sec. 19.    (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 14 of this act, the insurer paying the benefits is, to the extent of the payments, subrogated to a right of action for damages by the injured person against the alleged tort feasor.  The right of action for damages to which the 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 under section 18 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 a person to whom the benefits prescribed in sections 3 and 4 of this act have been paid by another insurer, it will reimburse the other insurer to the extent of the benefits, but not in excess of the amount of damages so recoverable for the types of loss covered by the benefits, or in excess of the limits of its liability under its policy; and that the issue of liability for the reimbursement and the amount of it must be decided by mandatory, binding intercompany arbitration procedures approved by the insurance commissioner.  If the insurer providing the benefits also has provided coverage to the same policyholder for collision or upset arising out of the same occurrence, the insurer shall also submit the issue of recovery of any payments under the policy to the same arbitration proceedings as provided in this section.

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

 

          NEW SECTION.  Sec. 20.    Where the injured party or the insurer or both have incurred legal expenses in recovering payments that benefit both, whether incurred in an action for damages or otherwise, the expenses shall be equitably apportioned.

 

          NEW SECTION.  Sec. 21.    A person receiving the benefits prescribed in sections 3 and 4 of this act shall participate and cooperate as required under the coverage in 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 the person shall so participate and cooperate as consideration for the payment of the benefits.

 

          NEW SECTION.  Sec. 22.    (1) Notwithstanding any other law, in an 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 is no right of recovery for noneconomic loss.

          (2) The limitations prescribed in subsection (1) of this section do 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. 23.    In an action in tort brought as a result of property damage, bodily injury, sickness, or disease, caused by an accident occurring after December 31, 1990, 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 that would have been payable on the past income and net of a reasonable set-off for income taxes prospectively payable on the future income.  In the absence of proof supporting a different set-off for income taxes, the set-off shall be equivalent to fifteen percent of the total amount of the lost income; and

          (2) The defendant is entitled to an instruction that reasonably and fairly states the law on income taxation of damages that may be awarded to the plaintiff.

 

          NEW SECTION.  Sec. 24.    A 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 the other party or insurer as may reasonably be required and shall do all things reasonably necessary to enable the other 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 the records shall pay all reasonable costs connected with them.

 

          NEW SECTION.  Sec. 25.    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. 26.    In an action on which a person or an insurer on behalf of its insured has made payments to or on behalf of a plaintiff before trial, the payments shall not be construed as an admission of liability by the person, or the insurer or its insured, in an action brought to recover for personal injuries to the plaintiff, or for the wrongful death of another, or for property damage or destruction.  However, if the action results in a verdict in favor of the plaintiff, the defendant may introduce evidence of the 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 before the trial.  No such advance payment made by an insurer on behalf of the insured may be construed to be in lieu of or in addition to the limits of liability of the insurer under an existing liability of the insurer under an existing policy of insurance.  The amounts paid in advance are deemed to have been made pursuant to the limits of the policy and shall be credited to the insurer's obligation to the insured arising from the policy and shall be deducted from that obligation.

 

          NEW SECTION.  Sec. 27.    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. 28.    This act shall take effect January 1, 1991.

 

          NEW SECTION.  Sec. 29.    Sections 1 through 27 of this act shall constitute a new chapter in Title 48 RCW.