Washington Senate Bill Report SB 6252 (Jan. 22, 2024)

Summary

A Senate Bill Report on SB 6252, an act relating to enhancing consumer protections for automobile insurance coverage, dated as of January 22, 2024 and prepared by staff of the Senate Committee on Business, Financial Services, Gaming & Trade. It lists Senators Stanford, Hasegawa, Kuderer, Nobles and Valdez as sponsors and committee activity on 1/23/24. The report summarizes background on mandatory automobile insurance in Washington State. It states that the bill would require basic automobile insurance contracts issued or renewed on or after January 1, 2025 to include a right to an appraisal and a provision that a repairable vehicle be restored to its prior condition, and that claim payment be based on reasonable and necessary costs at the claimant's chosen repair facility. It lists no appropriation and a fiscal note requested on January 17, 2024.

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                            SENATE BILL REPORT
                                  SB 6252

                                      As of January 22, 2024

Title: An act relating to enhancing consumer protections for automobile insurance coverage.

Brief Description: Enhancing consumer protections for automobile insurance coverage.

Sponsors: Senators Stanford, Hasegawa, Kuderer, Nobles and Valdez.

Brief History:
     Committee Activity: Business, Financial Services, Gaming & Trade: 1/23/24.


                                     Brief Summary of Bill
           • Requires every basic automobile insurance contract to include a
             provision for the right to an appraisal and a provision requiring that, if
             repairable, the amount paid under the claim allows the vehicle to be
             restored to its condition prior to the loss.
           • Requires the payment of an automobile insurance claim be based on
             reasonable and necessary costs at the claimant's chosen repair facility.


SENATE COMMITTEE ON BUSINESS, FINANCIAL SERVICES, GAMING & TRADE

     Staff: Kellee Gunn (786-7429)

     Background: Every person who drives an automobile or motorcycle in Washington State
     is required to have an automobile insurance policy. If not carrying a liability insurance
     policy a person may apply for a certificate of deposit to pay for their liability, have a
     liability bond filed by an authorized surety bond company, or be self-inured if in possession
     of more than 26 vehicles.

     The automobile insurance policy contract must provide that the insurer will give the insured
     a certain amount of notice prior to cancellation or nonrenewal.




     This analysis was prepared by non-partisan legislative staff for the use of legislative
     members in their deliberations. This analysis is not part of the legislation nor does it
     constitute a statement of legislative intent.

Senate Bill Report                              -1-                                             SB 6252
     The Office of the Insurance Commissioner is responsible for adopting standard policy forms
     for property and casualty insurance, including automobile insurance. The Department of
     Licensing is responsible for ensuring drivers have the mandatory automobile insurance and
     approves insurance identification cards produced by insurers to be used for proof of
     compliance.

     Summary of Bill: Requires every basic automobile insurance contract issued or renewed
     on or after January 1, 2025, to include a provision for the right to an appraisal and a
     provision, if the car is repairable, requiring the amount paid by the insurance company
     restore the vehicle to its prior condition before the loss.

     A basic automobile insurance contract is one that includes first-party coverage for physical
     damage of an automobile.

     Right to an Appraisal. The automobile insurance contract must have an appraisal clause
     containing specific language on the right to appraisal to resolve disputes between the insurer
     and the insured regarding actual cash value and amount of loss on the damaged vehicle. The
     provision requires:
        • each party to choose a competent and disinterested appraiser within ten days of a
           written demand when the insurance company and the policy holder are unable to
           agree as to the amount of loss;
        • the appraiser to pick a competent and disinterested umpire within 15 days. If the
           appraiser does not wish to appoint an umpire, either party may request a judge of a
           court of competent jurisdiction to pick an umpire;
        • the appraiser to appraise a loss, make separate findings regarding the amount of loss
           for each element of loss and, if unable to agree on the losses, to submit their
           differences to the umpire;
        • the amount of loss to be determined either by agreement of the appraisers or by
           agreement of one appraiser and the umpire;
        • reimbursement if the amount of loss determined is greater than the amount of loss the
           insurance company adjusted before the appraisal process was invoked; and
        • that the actual costs for the appraiser, attorneys' fees, and other necessary costs be
           reasonable.

     Right to Previous Condition if Repairable. The automobile insurance contract must also
     have a provision requiring that the amount paid under the claim must allow the vehicle to be
     restored to its condition prior to the loss, if repairable.

     Payment of Claim Be Reasonable. Payment of a claim must be based on reasonable and
     necessary costs at the claimant's chosen repair facility. The insurance company has the
     burden to prove the costs at the claimant's chosen repair facility are unreasonable or
     unnecessary. Nothing mandates an insurance company to pay for parts supplied by the
     original equipment manufacturer other than that the use of alternative parts would fail to


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     restore the vehicle to its previous condition.

     Appropriation: None.

     Fiscal Note: Requested on January 17, 2024.

     Creates Committee/Commission/Task Force that includes Legislative members: No.

     Effective Date: Ninety days after adjournment of session in which bill is passed.




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