Agents of Change: Amendments to Washington State Insurance Regulations Take Effect October 18

The Washington Insurance Commissioner has announced amendments to several key Washington insurance regulations under Washington Administrative Code (WAC) 284-30-300 et seq., which will become effective October 18, 2026.

This advisory summarizes the most important changes to the statute and provides a link to the full list of amendments.

Why are the Changes Happening Now?

According to the Insurance Commissioner, these changes were triggered by a “spike” in consumer complaints and lawsuits against insurers over the last six years, which the Commissioner believes “indicates potential insurance code violations.”

What Is WAC 284-30-300 et seq.?

WAC 284-30-300 et seq. establishes the minimum standards an insurance company must follow when handling Washington insurance claims.

Why Insurers Should Care

Under Washington law, statutory insurance regulations become part of an insurance policy. McLaughlin v. Travelers Commercial Ins. Co., 196 Wn.2d 631, 640, 476 P.3d 1032, 1037 (2020). In a Washington State insurance suit, allegations that these regulations were not followed could be a basis for a bad faith suit against an insurer, subjecting the insurer to extra-contractual damages.

Summary of Changes to WAC 284-30-300 et seq.

Definition of ‘Investigation’

The amendments expand what constitutes an “investigation” under Washington law. Previously, the definition broadly defined the term as “all activities of the insurer directly or indirectly related to the determination of liabilities under coverages afforded by an insurance policy or insurance contract.”

The new definition adds specific examples of investigative activities, including a “reasonable assessment whether each claim is covered, the scope and value of loss, and the reasonableness of costs to mitigate, treat, repair, replace, or recover the covered loss or damage.”

With examples added, insureds will surely argue that the definition has been expanded to include conduct that may not have been considered to be within an insurer’s scope of investigatory activity under the previous definition.

Changes to Specific Unfair Claims Settlement Practices

Denying Claims Without a Reasonable Investigation – Under WAC 284-30-330(4), insurers cannot deny a claim without conducting a “reasonable investigation.” The amended regulation clarifies that a “reasonable investigation” of damages cannot solely be based on estimating software.

The practical effect of this provision may lead to extra costs for insurers handling a variety of different claims. For instance, for decades, insurers have been utilizing automobile repair software to determine Actual Cash Value (ACV). E.g., Lara v. First Nat'l Ins. Co. of Am., 25 F.4th 1134, 1136 (9th Cir. 2022).

Additionally, many property insurers utilize claims technology such as Xactimate to estimate building repair costs. Under the new provision, insureds may argue that property insurers must incur the additional cost of hiring a construction contractor or risk facing liability for not conducting a reasonable investigation.

Coverage Decisions Now Triggered by Notice of Claim – Under revised WAC 284-30-330(5), insurers can no longer require a complete proof of loss before affirming or denying coverage. Instead, insurers must affirm or deny coverage within a reasonable time after receiving “notice” of a claim.

Unfortunately, the new regulations do not state what constitutes a notification of a claim. Prudent insurers should be diligent and transparent in documenting their interactions on a claim, particularly requests for information that are necessary for a complete evaluation.  

New Unfair Claims Practices

The amendments also create new unfair claims practices, including:

• Mitigation Approval Deadline – Insurers must approve or provide an approved scope of mitigation within five business days when the policy requires the claimant to protect property from further damage. WAC 284-30-330(20).
• Mitigation Deficiency Disclosure – Insurers that deem a mitigation plan to be deficient must disclose why the insured’s plan does not meet technical or industry standards, including a dollar-amount itemization. WAC 284-30-330(21).
• Appraiser Independence During Appraisal – Insurers cannot require an appraiser to adjust appraisal valuations during the appraisal process. WAC 284-30-330(22).
• Accurate Reporting to Consumer Agencies – Insurers cannot provide inaccurate information to a nationwide specialty consumer reporting agency (as defined in the federal Fair Credit Reporting Act). WAC 284-30-330(23).
• Periodic Claim File Access – Insurers must continue to adequately document all “pertinent events and dates” of claims and, under the new rules, insurers’ first-party insureds have the right to request and receive any non-privileged portion of their claim file “from time to time and at reasonable intervals.” WAC 284-30-340.
• Expanded Delay Explanations – Insurers must notify claimants every 30 days of the reasons any claim determination is incomplete and must include “a summary of any decisions or actions that are substantially related” to the disposition of the claim including the amount of the loss, consultation of experts, remaining needed information, and confirmation that any newly assigned adjuster “has reviewed the claim file and is prepared to timely continue the investigation.” WAC 284-30-370.

Other Changes

This article provides only a partial summary of the new changes. These claims handling regulations will add another layer of complexity to managing insurance claims in Washington. Please reach out to your Ballard Spahr attorney or one of the contacts on this Advisory if you have questions or would like to discuss how these changes affect your operations.

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