FINAL BILL REPORT

HB 310

                                  C 240 L 87

BYRepresentatives Zellinsky, Winsley, Haugen, Day, Bristow and Lux

Requiring insurers writing comprehensive and collision policies to also offer financing coverage.

House Committe on Financial Institutions & Insurance

Senate Committee on Financial Institutions

SYNOPSIS AS ENACTED

BACKGROUND:

The insurance code prohibits insurers from overinsuring property. Property insurance benefits may not exceed the fair market value of the property which is defined as the replacement cost less depreciation.

When a new motor vehicle is purchased and financed with a very low down payment, the loan amount may exceed the vehicle's fair market value shortly after delivery.  Sometimes this lower market value results in a situation where the insurance covering the vehicle is insufficient to fully satisfy the loan.

SUMMARY:

Motor vehicle liability insurers that sell collision and comprehensive coverage must provide, at the insured's request, coverage that will satisfy any outstanding indebtedness on a new motor vehicle. However, the insurer may deny coverage or benefits if the insured or someone on the insured's behalf attempts to obtain coverage or benefits in a fraudulent manner.

VOTES ON FINAL PASSAGE:

      House 97   0

      Senate    49     0(Senate amended)

      House 98   0(House concurred)

EFFECTIVE:January 1, 1988