Dan Veroff Discusses Washington Insurance Law | Property Insurance Coverage Law Blog


About half of Washington’s 42.6 million land acres are forested. Nearly 37% are on privately owned land. Many city areas are closely forested or close to forests. For instance, Seward Park in jap Seattle incorporates the 120-acre Magnificent Forest. An hour away is the attractive Mt. Baker-Snoqualmie National Forest. While Washington has not seen wildfires as damaging as in my residence state, California, it appears inevitable.

With nice forests come nice fires, and what follows are insurance coverage claims for complete losses, partial losses, smoke injury, or just the lack of use of a construction or enterprise on account of evacuation orders. The twentieth century started with the Yacolt Burn, then the biggest recorded forest hearth in Washington historical past, destroying 238,920 acres – greater than 370 sq. miles – and killing 38 folks in Clark, Cowlitz, and Skamania counties. In 2023, the Oregon Fire and the Gray Fire burned over 600 constructions, whereas 39 have been misplaced within the 2016 Hart Fire and 195 within the 2015 Okanogan Complex Fire. Despite the comparatively small burn areas of those 2023 wildfires, the common wildfire over the previous ten years has burned over 100 acres.

Last week, I obtained my Washington regulation license. To get the Washington license, I needed to examine and develop into accustomed to Washington regulation. I studied some for the aim of passing the take a look at solely, realizing that I’d possible by no means deal with a prison case, for instance, however I additionally took on some “extra credit” to review Washington’s insurance coverage regulation. I discovered that in contrast to California and lots of different states, Washington regulation imposes statutory penalties on insurance coverage corporations for violating the state’s honest claims dealing with practices guidelines. That penalty is extreme – the choose can multiply the jury’s damages award by three. The jury’s award itself can embody many damages, like legal professional charges, so the treble impact may be important.

In California, there isn’t a “red line” that an insurer crosses and mechanically will get penalized. Although the state has a set of unfair claims practices, courts forbid utilizing violations thereof as a foundation for locating legal responsibility. Instead, violations of California’s unfair claims dealing with guidelines can be utilized as proof {that a} jury considers in deciding if an insurer acted unreasonably. If the jury finds unreasonable conduct, it has the discretion to award further damages past coverage advantages like legal professional charges and emotional misery, however in no set quantity. Further, no penalty multiplies the awarded damages like in Washington. Will I discover that my Washington purchasers get higher claims providers as a result of the legal guidelines defend them extra? I’m desirous to see whether or not these sturdy legal guidelines end in higher declare dealing with in Washington.

Washington’s dangerous religion regulation may be damaged down into two classes: statutory and customary regulation. Statutory regulation is written by conventional lawmakers, like a legislature. Statutory regulation is usually supplemented by rules drafted by the imposing govt company, that are known as rules. Common regulation, alternatively, means the principles originate from judicial opinions and are borne from extra fundamental civil litigation ideas. A significant distinction between widespread regulation and statutory dangerous religion is often a clearer commonplace for when dangerous religion happens and extra penalties. Washington regulation has each, and the penalties are fairly steep. Comparatively, my residence state, California, has solely widespread regulation dangerous religion. I’m desirous to see if my Washington purchasers obtained higher declare service than my California purchasers.

Washington statutory regulation reiterates some ideas from widespread regulation. For instance, RCW 48.30.015(1) states, “[a]ny first party claimant to a policy of insurance who is unreasonably denied a claim for coverage or payment of benefits by an insurer may bring an action … to recover the actual damages sustained, together with the costs of the action, including reasonable attorneys’ fees and litigation costs[.]” In addition, the Washington Insurance Fair Claims Act, or “IFCA,” permits a choose to penalize the insurer by trebling – multiplying by 3 – the damages awarded by the jury. This is allowed each time an insurer has violated a selected listing of “unfair methods of competition and unfair or deceptive acts or practices of the insurer in the business of insurance,” which incorporates:

(1) Misrepresenting pertinent info or insurance coverage coverage provisions.

(2) Failing to acknowledge and act fairly promptly upon communications with respect to claims arising underneath insurance coverage insurance policies.

(3) Failing to undertake and implement affordable requirements for the immediate investigation of claims arising underneath insurance coverage insurance policies.

(4) Refusing to pay claims with out conducting an inexpensive investigation.

(5) Failing to affirm or deny protection of claims inside an inexpensive time after absolutely accomplished proof of loss documentation has been submitted.

(6) Not making an attempt in good religion to effectuate immediate, honest and equitable settlements of claims by which legal responsibility has develop into fairly clear. In explicit, this consists of an obligation to promptly pay property injury claims to harmless third events in clear legal responsibility conditions. If two or extra insurers share legal responsibility, they need to organize to make acceptable fee, leaving to themselves the burden of apportioning legal responsibility.

(7) Compelling a primary celebration claimant to provoke or undergo litigation, arbitration, or appraisal to recuperate quantities due underneath an insurance coverage coverage by providing considerably lower than the quantities finally recovered in such actions or proceedings.

(8) Attempting to settle a declare for lower than the quantity to which an inexpensive individual would have believed she or he was entitled by reference to written or printed promoting materials accompanying or made a part of an utility.

(9) Making a declare fee to a primary celebration claimant or beneficiary not accompanied by an announcement setting forth the protection underneath which the fee is made.

(10) Asserting to a primary celebration claimant a coverage of interesting arbitration awards in favor of insureds or first celebration claimants for the aim of compelling them to just accept settlements or compromises lower than the quantity awarded in arbitration.

(11) Delaying the investigation or fee of claims by requiring a primary celebration claimant or his or her doctor to submit a preliminary declare report after which requiring subsequent submissions which comprise considerably the identical data.

(12) Failing to promptly settle claims, the place legal responsibility has develop into fairly clear, underneath one portion of the insurance coverage coverage protection with a purpose to affect settlements underneath different parts of the insurance coverage coverage protection.

(13) Failing to promptly present an inexpensive rationalization of the premise within the insurance coverage coverage in relation to the info or relevant regulation for denial of a declare or for the supply of a compromise settlement.

(14) Unfairly discriminating towards claimants as a result of they’re represented by a public adjuster.

(15) Failing to expeditiously honor drafts given in settlement of claims. A failure to honor a draft inside three working days after discover of receipt by the payor financial institution will represent a violation of this provision. Dishonor of a draft for legitimate causes associated to the settlement of the declare won’t represent a violation of this provision.

(16) Failing to undertake and implement affordable requirements for the processing and fee of claims after the duty to pay has been established. Except as to these situations the place the time for fee is ruled by statute or rule or is ready forth in an relevant contract, procedures which aren’t designed to ship fee, whether or not by examine, draft, digital funds switch, pay as you go card, or different methodology of digital fee to the payee in fee of a settled declare inside fifteen enterprise days after receipt by the insurer or its legal professional of correctly executed releases or different settlement paperwork are usually not acceptable. Where the insurer is obligated to furnish an acceptable launch or settlement doc to a claimant, it should accomplish that inside twenty working days after a settlement has been reached.

(17) Delaying value determinations or including to their price underneath insurance coverage coverage appraisal provisions via using appraisers from exterior of the loss space. The use of appraisers from exterior the loss space is acceptable solely the place the distinctive nature of the loss or a scarcity of competent native appraisers make using out-of-area appraisers needed.

(18) Failing to make a great religion effort to settle a declare earlier than exercising a contract proper to an appraisal.

(19) Negotiating or settling a declare immediately with any claimant identified to be represented by an legal professional with out the legal professional’s data and consent. This doesn’t prohibit routine inquiries to a primary celebration claimant to establish the claimant or to acquire particulars in regards to the declare.

Washington widespread regulation claims “for bad faith are analyzed by applying the same principles as any other tort: duty, breach of that duty, and damages proximately caused by any breach of duty.” Smith v. Safeco Ins. Co., 78 P.3d 1274, 1277 (Wash. 2003). To succeed on a standard regulation dangerous religion declare, “an insured is required to show the breach was unreasonable, frivolous, or unfounded.” Id.; Heide v. State Farm Mutual Automobile Ins. Co., 261 F. Supp. 3d 1104, 1109 (W.D. Wash. 2017). Whether an insurance coverage firm’s habits constituted dangerous religion is a query of truth, usually reserved to the jury. Id. Evidence that an insurer acted in a way proscribed by the IFCA is proof of widespread regulation dangerous religion. See, e.g., Coventry Associates v. American States Ins. Co., 961 P.2nd 933, 936-938 (Wash. 1998).

With loads of energy behind policyholders handled unfairly, Washington ought to foster an surroundings of immediate, honest, and thorough declare adjustment. Whether that truly happens in observe is one other story. I sit up for serving to the policyholders of Washington.


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