D.C. motorists and out-of-state drivers -- including commuters--must have auto insurance by Oct. 1 to continue driving legally in the District, under the mandatory no-fault insurance law that was allowed to stand by the City Council this week.

In most cases, insurance industry spokesmen said, commuters' existing insurance policies automatically will be adjusted to reflect the District's requirements.

The City Council Tuesday night turned back a concerted attempt to repeal the no-fault law, and most city officials say they now expect the measure to go into effect as scheduled.

The most recent D.C. Department of Transportation study, done several years ago, indicated that about 100,000 vehicles--or about 40 percent--of the city's approximately 250,000 registered vehicles were not insured.

As of Oct. 1, motorists will be required to show proof of insurance when involved in an accident or other traffic violation, when registering a new car or when renewing license tags.

Officials say they expect enforcement of the new law to be minimal until next April, when most motorists renew their license tags.

The law requires insurance companies to report canceled policies to the Transportation Department.

Persons found guilty of not having insurance will be subject to a misdemeanor fine of $100 to $300 and/or 30 days in jail for first offenses. A second offense could bring a fine of $300 to $500 and a jail term of up to 90 days.

The insurance law provides that certain minimum amounts of coverage be included in all policies sold in the District. The Department of Transportation plans to send a letter to D.C. motorists next month explaining the required insurance coverage and how to obtain it.

In most cases, the policies of D.C. motorists whose vehicles are already insured will be adjusted to take into account the new law. Those motorists will be informed of the changes by their insurance firms, industry spokesmen said. Coverage against uninsured motorists will still be required.

Insurance officials have estimated that an "average good driver" who has a clean record and uses his car sparingly should pay about $175 to $220 for mimimum coverage under the law, slightly more than the average current premiums for those who do have insurance.

High-risk drivers, those with poor driving records and high-priced cars, could pay as much as $1,200 to $1,700 for insurance, according to the Government Employees Insurance Co. (Geico), which writes about 30 percent of the automobile policies sold in the District.

Under the no-fault provisions of the law, drivers' insurance will pay for their own medical bills and those of their passengers. The benefits will be paid without a determination of which driver is "at fault" in an accident.

Insurance companies will be required to pay valid injury claims--primarily medical bills--within 30 days.

No-fault protection will give each injured person up to $126,000 in benefits, including $100,000 for medical or rehabilitation expenses, up to $24,000 in lost wages not covered by workers' compensation, and $2,000 for funeral expenses.

The coverage will allow up to $50 a day for ordinary personal services, such as shopping and transportation.

In exchange for expected quick payment of injury claims, the law prohibits suits against drivers for nonmedical "pain and suffering" unless the medical expenses of the victim exceed $5,000 or in cases of permanent disfigurement or death.