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On August 18, 2026, the Washington State Office of the Insurance Commissioner formally adopted changes to Washington State’s insurance regulations, raising and strengthening the minimum standards that insurers must comply with during any claim investigation.
Washington Law Seeks to Protect Insureds From Unfair and Deceptive Insurance Practices
As background, Washington has historically had strong legal protections for people who make claims against their insurance companies for benefits—for example, personal injury claims or claims for property damage or theft.
For more detail about these protections, you can see a previous blog post I made here, but in short, insurers are prohibited from committing unfair or deceptive acts or practices in the business of insurance. This means when handling insurance claims, insurance companies must do so promptly, reasonably, fairly, and honestly.
But what does that really mean? When has an insurer met those standards, and when has it not? At what point does an insurance company’s conduct become “unfair or deceptive”?
The New Insurance Regulations Strengthen and Clarify When An Act Is “Unfair or Deceptive”
Although Washington’s laws already contained some standards for when an insurance company’s conduct is “unfair or deceptive,” the newly adopted insurance regulation changes help strengthen and clarify this by providing even more detail.
Promptness:
Previously, the regulations required insurers to conduct their claims investigations “promptly.” The new regulations include more detail regarding what that means.
If the insurer needs more than 30 days to investigate a claim, it must notify the claimant within that initial 30-day period, and every 30 days thereafter until the investigation is completed. Those notices must explain why the investigation remains unresolved. The notices must also include a summary of any decisions or actions “substantially related to the disposition of a claim,” including each item the insurer is waiting for to complete its investigation and whether the insurer has hired or retained any consultants. These changes will hopefully help not only ensure the insurance company is acting promptly, but also that the claimant is kept well informed of the status of the claim, what the insurance company is doing to move the investigation forward, what if anything the claimant can provide that will help in that process, and ultimately why the insurance company makes the decisions that it does.
Also, whenever a new adjuster is assigned to a case, the insurer must confirm when that new adjuster has reviewed the claim file and is prepared to timely continue the investigation. Not surprisingly, the reassignment of a claim to a new adjuster is common and can naturally slow an investigation down while the new adjuster gets “up to speed.” This new regulation will hopefully help encourage insurance companies to make sure any reassignments go as quickly and smoothly as possible.
Reasonableness:
Previously, the regulations required insurers to conduct “reasonable investigations.” The new regulations include add more clarity to that as well.
For example, the new regulations make explicit that insurance companies cannot deny a claim in part or in full without conducting a reasonable investigation (before, the underlined words were not included). This is significant because many if not most insurance claims are not denied outright. Rather, an insurance company may say “we will pay your claim but not as much as you have asked for.” But this is just as unfair or deceptive as denying a claim in full, if it is done without a reasonable basis.
Also, the new regulations state that when conducting an investigation, an insurance company cannot rely solely on the use of a database, survey, estimating software, or benchmarks. This is a common practice in the insurance industry—using databases to estimate how much a loss is worth. But while databases can be a helpful tool, using them as the only basis for an investigation risks ignoring the unique impacts to each individual claimant. These databases also tend to undervalue claims—benefiting the insurance company while harming their insured. The new regulations make clear that is not an acceptable business practice.
Fairness/Honesty:
As already mentioned above, the new regulations require insurance companies to stay in regular communication with their claimants and specify what kinds of information must be provided. They also require insurance companies notify a claimant when databases are used, and to provide a claimant with any portion of their claim file within fifteen business days of a request (with some limitations for portions of the claim file that are legally privileged).
And they include more specific rules regarding the inspection, mitigation, repair, and payment of property damage, designed to protect the rights of claimants to do things like choose their preferred repair facility, without undue interference from the insurance company.
These changes to the law should help ensure that insurance companies are behaving fairly and honestly, by giving claimants greater access to information about what exactly it is that their insurer is doing to investigate their claim.
The New Insurance Regulations Go Into Effect October 18, 2026
These new rules will go a long way toward holding insurance companies accountable when they don’t handle insurance claims the right way. These new rules officially go into effect on October 18, 2026.