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Washington State Auto Insurance Requirements
by Doug Cohen

What is the Mandatory Auto Insurance Law?
The law requires anyone driving a car in Washington state to have an insurance liability policy, a certificate of deposit, or a liability bond to the required limits. If you have 26 or more cars, you may self-insure.

Under the law, you’re required to have a car insurance liability policy with limits of at least 25/50/10. This means:
$25,000 for injury to another person
$50,000 for injuries to all other persons
$10,000 for damage to another’s property

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You must carry the same auto liability insurance limits if you choose to buy a bond instead of an auto insurance policy. If you use a certificate of deposit, you must deposit $60,000 in cash or securities with the Office of the State Treasurer. If you’re insuring 26 or more cars, you can self-insure through the Washington State Department of Licensing.

Proof of insurance
If you’re stopped by a law enforcement officer, you must present an insurance identification card showing that either the car is, or you are, insured.

Your auto insurance company must provide you with an identification card when they issue or renew your car insurance liability policy. At your request, the company will provide a card or temporary proof of insurance for each car covered under your policy.

The insurance identification card must include the name of the insurance company, the policy number, and the policy’s effective and expiration dates. It must also include a description of the insured car(s) and/or the name of the insured driver.

If you do not carry proof of insurance and you are stopped by law enforcement, the state of Washington considers it a traffic infraction. You will receive a $450 fine and it may go on your driving record. The courts could add other fees to your fines, such as a public safety and education assessment, which is 70 percent of all fines.

Out-of-state drivers
Even drivers registered in other states who drive in Washington state must comply with Washington’s Mandatory Auto Insurance Law.

Out-of-state drivers who plan to drive in Washington should check their auto insurance policies. Most insurance policies include a broadening clause that raises the automobile liability limits to the minimum insurance requirements of the particular state they’re driving in.

Autos exempt from the Mandatory Auto Insurance Law
• Specially licensed antique autos over 40 years old
• Collector’s cars over 30 years old
• Publicly-owned autos (cars owned, rented or leased by state, federal, city, county, and town governments, school districts and political subdivisions)
• Cars registered with the Washington Utilities and Transportation Commission as common or contract carriers (any truck that hauls for payment)
• Motorcycles
• Motor-driven cycles, such as motor scooters
• Mopeds
Regardless of this exemption, all drivers are subject to the state’s Financial Responsibility Law. This law requires the person who is responsible for the damage or injury to pay the loss.
Special note:The Mandatory Auto Insurance law is under the authority of the Department of Licensing.


Understanding your auto insurance policy

Your auto insurance policy is a contract between you and your insurance company. It spells out exactly what the company agrees to do in exchange for the premium that you pay. This contract is divided into two sections: a declarations page and the policy itself.

The Declarations Page
This section of the policy includes basic details of the agreement. It is important that you review this page to make sure all the information is correct and all the coverages you requested are included.

The Declarations Page includes:
Name of the insurance company
Name(s) of the policyholder(s)
Policy number
Policy period
Description of the vehicle(s) insured
Coverages purchased
Limits of liability and deductibles purchased
Premium charge for each coverage
List of forms that are a part of the policy

The Policy
The second part of your insurance contract is the policy itself. This includes:
Insuring Agreement
When and where coverage applies
Conditions if the vehicle is financed
General Conditions
Mutual Conditions
Exceptions and Endorsements of the policy

Types of coverage

There are many different types of coverages available to meet your auto insurance needs. Some are required and some are optional. Here are brief descriptions of the available coverages:

Washington state requires liability coverage. This covers bodily injury and damage to property that you cause to others while using your car.

Personal injury protection
This covers a limited amount of medical and hospital costs, income continuation, funeral expenses, and loss of services. Coverage limits are defined in the policy.
(more details on this below under What is PIP?)

Medical payments
This covers medical and funeral expenses (not all companies offer this coverage).

Uninsured/underinsured motorist bodily injury
This covers injuries an uninsured or under-insured driver causes to an insured person.

Uninsured/under insured motorist property damage
This covers property damage an uninsured or under-insured driver causes to your insured car.

Collision coverage
This covers damage to your car that is caused by a collision.

Comprehensive coverage (other than collision)
This covers damage to your car -- except by collision. For example, this covers your car if a tree falls on it or someone vandalizes it.

Emergency road service
This covers towing when your car breaks down.

Car rental expense
If you have a claim that is covered under your auto policy, this coverage pays to rent a car. Be sure to check your policy for any limitations.

Death, dismemberment and loss of sight
This pays for death and certain injuries to people named in your policy due to an auto accident.

GAP coverage
In the event your vehicle is a total loss, this pays the difference between the current market value of your auto and the amount you still owe the lender.

Custom equipment coverage
This covers direct and accidental loss to custom furnishings or equipment.

Many companies also offer other endorsements (additional coverage). Ask your insurance agent or broker about:

  • Trailer/camper body coverage
  • Snowmobile coverage
  • Limited Mexico coverage
  • Joint ownership coverage
  • Auto loan/lease coverage

Remember to check your declarations page to verify the coverage you purchased.


What is Personal Injury Protection (PIP)?
Personal Injury Protection (PIP) is an insurance coverage for medical and other expenses resulting from an automobile accident, for people specified in the policy, regardless of who is at fault in the accident.

Is it required by law?
Washington's Mandatory Insurance law does not require PIP coverage on automobile policies. An insurance company is required to offer you the coverage when you buy an auto insurance policy. If you don’t want it you can reject it in writing. If you haven't signed the rejection the car insurance company must add the coverage and charge a premium for it.

Who is covered?
The person named in the policy as the 'named insured', and residents of the named insured's household related by blood, marriage or adoption, step or foster children are generally covered for injuries incurred in an accident. Also passengers or pedestrians are covered interestingly enough. These people will be eligible for payments no matter who is at fault in the accident.

What does PIP cover?
PIP covers reasonable and necessary medical expenses for injuries sustained in an automobile accident, up to three years from the date of the accident and up to $10,000. PIP also offers income replacement coverage limited to a maximum of $200 per week for one year, after a person has been disabled for 14 days after the accident. Funeral expenses of $2,000 and loss of services (payment to others for work you can't do) of up to $5,000 are also included in the coverage. Payments are made for costs that are actually incurred by the injured person.

How much does it cost?
The rising cost of medical care has made PIP coverage more expensive in recent years. If you carry PIP on your car it generally applies to all autos you insure, and companies charge a premium for every auto.

What doesn’t it cover?
PIP doesn't typically cover injuries caused by using farm equipment, recreational or off road vehicles, mopeds or motor cycles (PIP coverage is available on motorcycle policies). It won't cover intentional injuries to the insured person or if the person is injured in organized car racing activities or committing a felony.

Do I need it?
That's your choice. If you are retired, have other medical and disability coverage, PIP may be duplicate coverage. If you and your family have health care coverage, most of your medical bills may be paid, subject to the plan's limits and co payments. If you seldom transport passengers who aren't residents of your household, you may not need the added protection.

Are there other choices?
Some companies offer basic medical payments coverage, usually with some level of modest coverage, such as $5,000 for medical treatment only. This coverage is also available regardless of who is at fault. You can also request higher limits for PIP coverage if you feel you need more protection than the basic limits offer.


Shopping for automobile insurance

Many insurers offer auto insurance in Washington state. Under state law, insurers may consider your age, driving record, where you live, credit history, and other factors to decide if they will offer you coverage. Not every insurer will offer you coverage.

If an agent or broker is unable to find coverage for you, it doesn’t mean that there isn’t an insurer willing to cover you. No single agent or broker will have access to all auto insurers doing business in Washington state.

There are three segments of the auto insurance market you should know about:
Preferred market -- This market features the lowest premiums and it is available to low-risk drivers with exceptional driving records.  Many of these insurers can be found here.
Standard market -- This market refers to the average driver who uses family-type cars and has a reasonably good driving record. Some of those insurers can be found here.
Non-standard market -- This market includes young drivers with less experience, drivers with multiple tickets or accidents, and drivers with reckless or drunk driving histories. Hard to locate but two or three may be found here.

Most insurers offer coverage that falls into the standard or the preferred markets. A few corporations have several companies within their group and establish tiers that range from the preferred market to the non-standard market.

Without recommending or suggesting specific companies, we do offer tips to help you shop for auto insurance. Regardless of how you shop or who you choose, it is important to do your homework in advance. You should:

-Know what types and limits of coverage you need.

-Ensure you’re dealing with an authorized company and a licensed agent or broker.

-Make sure you have the make, model and other details of the vehicle you wish to insure.

-Answer any questions about your driving record and accident history fully and accurately.

-Shop for customer service and price.

-Agents and brokers selling insurance in Washington must be licensed with the state of Washington State Insurance Commissioner's Office which regulates nearly 85,000 licensees. Some are employed exclusively by a specific insurer, while others work independently. You can find agents and brokers:

-in your local phone book

-through referrals from friends and family

-here on the Internet at InstantCarInsurance.com or Ensurance.com

Insurance can be a sophisticated product. You need to do your homework and shop the market, regardless of whether you buy in the traditional manner or here online.


Facts About The Washington State
Insurance Commissioner's Office

The Washington State Insurance Commissioner's Office has responsibility for regulating all insurance business in the State of Washington under the authority granted by the insurance laws of the state. The people of Washington paid approximately $23 billion in 2003 for insurance to more than 1,381 insurance companies, Health Care Service Contractors (HCSC) and Health Maintenance Organizations (HMO). This figure includes money spent for life, health, property, casualty and marine insurance.

Insurance is regulated by individual states, not the federal government. The State of Washington Insurance Commissioner's Office was created by the first state Legislature in 1889-90, with the office first administered as an adjunct of the duties of the Secretary of State. It became an independent state office in 1907, and the first Insurance Commissioner was elected in 1908.

At first, the main functions of the office were simply to register insurance companies that wanted to do business in Washington and to oversee compliance and penalty provisions of the Washington's Insurance Code. Other duties included supervision of insurance company formation within the state and monitoring of the reinsurance market. Over the years, the Commissioner's duties have expanded to include the ascertaining that all authorized insurance companies meet and maintain rigid financial, legal, and other requirements for doing business in this state. The agency also licenses a number of insurance-related professionals, including agents, brokers and adjusters.

Today, consumer protection is the most important job of the Insurance Commissioner, who coordinates a wide variety of protective and assistance services. His investigators follow up any consumer complaint, looking into the circumstances of disputes between consumers and companies, and taking the consumer's side whenever companies have acted improperly. Consumer Protection also responds to thousands of questions from consumers every year, and the agency publishes and distributes consumer guides and fact sheets to help educate Washington state residents about their choices and rights when buying and using health coverage. In addition, the office's SHIBA Help-Line offers the services of trained volunteers statewide for counseling, education and other assistance to consumers with health insurance and health care access issues and questions.

Other insurance facts about Washington state:
About 60 insurance companies in the state are known as domestic insurers, with headquarters located in Washington State. Domestic companies are scheduled to be examined by the Insurance Commissioner's office at least once every five years.

Anyone selling insurance in Washington state must hold a license from the Office of the Insurance Commissioner. Overseeing the testing, licensing, continuing education and professional performance of the more than 86,000 licensees currently in the state constitutes a major part of the insurance office staff's workload.

The agency also is responsible for collection of a tax assessed on insurance premiums. A century ago, a little less than $15,000 in premium tax money was collected. By comparison, the same tax today generates nearly $229 million a year for the state's general fund. No general fund money, incidentally, is used to operate the Office of the Insurance Commissioner. The cost of the agency's operations is funded by a small separate levy on insurers, who by law must shoulder the cost of their own regulation.

A special consumer-assistance arm of the agency offers information to senior citizens, people nearing retirement age, and others interested in health insurance-related benefits ranging from Medicare and Medicare Supplements to Long-Term Care insurance and employer-related retirement benefits. The Statewide Health Insurance Benefits Advisors (SHIBA, pronounced sheee-bah!) are community-level volunteers trained by experts in the Commissioner's office to answer consumer questions in these areas and to help work out problems when they occur.

For more information:
To contact SHIBA's referral service, or the Consumer Advocacy and Outreach Division, call the general consumer hot line, toll-free, at 1-800-562-6900.

Agents, brokers and other insurance licensees may contact the agency directly through the Investigations and Enforcement Division, which includes Licensing and Continuing Education. That Division can be reached by phone at 360-725-7144.
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