Two New Laws to Affect Washington Auto Insurance

Two pieces of legislation that passed a couple of months ago are going to change certain facets of car insurance law in Washington state. The first of these is a bill that pertains to car-sharing, which in the majority of the states is not allowed under regular insurance policies. The second bill will make it easier for insurance companies to implement usage-based car insurance services in the state.

The bills should help lower car insurance costs as well as potentially make some money off of an idle car.

Car-Sharing Availability

Private car insurance policies generally prohibit the commercial use of an insured car. This makes it very difficult for owners to rent them out. Penalties sometimes include cancellation of policies, or non-renewal notices.

Car-owners that have a short commute to work, and only use their cars to cover long distances would not be able to make money off of a car otherwise collecting dust in the garage. People who have a second car that gets seldom-used would be in the same predicament.

PRWeb states, “The bill now legalizes what some have already been doing: making extra income by keeping the cheaper car insurance policies they can find for personal use while lending out their vehicle to a sharing service. It does so by transferring liability from the owner’s insurer to the sharing service’s insurer while the car is loaned out.”

The car owner’s insurance policy will not cover those renting the car. Therefore, one caveat that made car insurance companies leery of car-sharing is resolved. Car-sharing legislation has also passed in Oregon and California.

If you would like to learn more about existing car insurance laws as well as many helpful tips that could help you save on your car insurance, please visit our website, here.

Usage-based Car Insurance

HB 2361 will make it simpler for optional usage-based programs, like Progressive’s Snapshot, to be implemented in Washington. According to PRWeb, “The new law allows insurers to label formulas used in conjunction with usage-based devices a trade secret, making them free from public inspection.”

It will also dictate what data that is recorded can be used for as well as who can gather data. Car owner privacy shouldn’t be a concern, because information gotten in this manner cannot be sold without consent.

Both bills have been signed into law by Governor Christine Gregoire, and become effective  June 7, 2012. They should lend a helping hand to Washington policyholders who want to rent out their cars, as well as those who would benefit from usage-based programs.

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