Full Disclosure: Updates to Washington Laws Regarding Insurance Premium Increases

Washington recently passed legislation which is geared towards more transparency in the insurance industry for consumers. The law is divided into two phases. Phase one is in place right now. Phase two is set to take effect in June of 2027. The rules as a whole are intended to increase protections for insured people in a world where insurance premiums seem to be ever-rising. At this time, these laws only apply to private passenger auto insurance policies and homeowner’s insurance policies.

Rising Insurance Premiums: Ask Why!

Home and auto insurance rates have been skyrocketing throughout the country in recent years at a rate far greater than inflation. Auto insurance premiums in the state have increased by more than 15% each year since 2022, with a 17% hike in 2025. Washington has issued new regulations designed to bring transparency to home and auto insurance rate increases.

Drivers often get sticker shock when they receive the notice from the insurance company informing them of the renewal rate for their policy. In the past, this notice came with little explanation.  The insurance company merely told insured people what they have to pay should they expect to maintain their insurance policy. Drivers faced the choice of paying what the insurance company asks or switching their coverage. There seemed to be a consistent missing piece of information: why is the rate increasing?

Beginning on June 1, 2024, new rules went into effect in Washington. In the first phase of the rule, which lasts until 2027 (although there is talk of delaying the second phase until 2029), the insurance company must include a disclaimer on the front page of a renewed policy informing the consumer that they have the right to request an explanation from the insurance company for any increase in their premiums. In response, the insurance company is obligated to deliver a concise and reasonable explanation of the increase in writing within 20 days of receiving a written request.

The second phase of the rule imposes more extensive requirements on insurance companies. Under this phase, the insurance company is required to deliver a notice to the consumer twenty days before the renewal of a policy in which the premiums are scheduled to increase by 10% or more. Then, the insurance company must provide a more specific explanation of the premium increase that can include factors that relate to the customer themselves. Instead of a concise and reasonable explanation, the insurance company is expected to go into more detail.

The new rules do not restrict insurance companies from dramatically raising rates. The regulations only give you the right to an explanation from the insurance company. The hope is that transparency may keep insurance companies from hiking rates, knowing that they could lose customer loyalty if they take things too far and that they could be subject to additional legal liability for bad conduct.

The ultimate takeaway from these new rules is that if you are notified of an increase to your insurance premium, you should always send a written request to your insurance company for an explanation of the increase.

Insurance Companies Cannot Raise Rates Under Certain Circumstances

Recent rules have also restricted an insurance company’s ability to raise rates after drivers have been involved in a collision if the driver is not at fault for causing the collision. This may come up when motorists face premium increases after they have filed claims under their uninsured or underinsured motorist coverage. However, these laws are not an outright prohibition on raising rates in these instances. Insurance companies sometimes offer discounts for drivers who do not have a history of claims, and they can still take away these discounts when you are involved in a crash, even if the crash wasn’t your fault. Again, it is important to request an explanation for any increase in your premium so that you can better understand what the insurance company is using and relying upon to make such an increase.

How Insurance Rates Impact People Injured in Collisions

Despite these evolving rules put in place, we are still seeing unprecedented rates of premium increases. Ultimately, this has consequential impacts on every other driver on the road. Drivers may end up being unable to afford coverage altogether and take the chance of driving without any insurance coverage at all. Additionally, drivers could be forced to obtain the lowest coverage possible ($25,000 per person) to save money. This leaves injured people at risk for having to bear the financial burden when there is not enough insurance to cover their damages.

If you have been injured in a motor vehicle crash, you can explore your options and obtain guidance through the insurance process by speaking to a Vancouver motor vehicle accident attorney at Schauermann Thayer. We offer free consultations  and you can schedule one by filling out an online contact form or by calling us today at 360-695-4244.