Washington Updates Insurance Claims Handling Rules, Deadlines

New claims handling rules in Washington require insurers to follow updated rules that establish deadlines for responding to policyholders, conducting investigations, issuing denials and making payments.

The rules, which took effect Oct. 18, require insurers to notify policyholders within 30 days whether claims have been accepted or denied and provide updates every 30 days if a claim is delayed.

The updated rules issued by Washington Insurance Commissioner Patty Kuderer revise standards for handling claims that had not been updated since their adoption in 1978.

The new rules establish specific timelines and documentation requirements for communication, investigations, denials and payments. The prohibit insurers from denying claims without conducting an investigation and state they cannot rely solely on a database for that investigation.

Other changes include:

• Removing language concerning the frequency of unfair claims practices to reinforce that any unfair claims practice can violate state law.
• Establishing standards for auto damage and total loss claims, including inspection requirements, communications, valuation data sources and handling additional damage.
• Requiring insurers that use databases to determine pricing or labor rates to provide information about those databases upon request. Policyholders can also request an in-person inspection if they dispute the accuracy of a virtual photo inspection.
• Requiring insurers to explain claim denials, identify relevant policy provisions, provide vehicle valuation reports and disclose the data sources used in determining vehicle values.

The changes follow a 2023 workshop held by the Washington Office of the Insurance Commissioner in response to an increase in auto insurance complaints. More than 80% of complaints filed with the agency leading up to the workshop involved claims handling issues, according to the office.