Washington Now Requires Insurers to Disclose Estimate Pricing Sources

Insurers in Washington state must now tell claimants where the pricing in their property estimates comes from, under amended claims-handling rules that took effect Oct. 18.

The new provision, WAC 284-30-380(8), applies when an insurer uses a database, survey, estimating software or benchmarks to set material pricing, labor rates or both. On request, the insurer must provide the claimant with the date the data was collected, where it was collected and which businesses supplied the cost data.

The rule reads: “If an insurer uses a database, survey, estimating software or benchmarks to account for either material pricing, labor rate or both, and upon request of the claimant, the insurer must provide the claimant with the date the data was collected, where the data was collected from, and which businesses provided the cost data to the database, survey, estimating software or benchmarks.”

Washington Insurance Commissioner Patty Kuderer adopted the change Aug. 18 as part of rulemaking order WSR 26-17-089, which amends 15 sections of the state’s unfair claims settlement practices regulation. The order states the goal is a fairer and more transparent claims process, with clearer coverage and valuation decisions and more detailed information for claimants.

The requirement covers estimating platforms widely used in property and restoration claims, including Xactimate^®.

Software alone is not enough

A companion change limits how heavily insurers can lean on those same tools. The amended WAC 284-30-330(4) states that “a reasonable investigation may not rely solely on the use of a database,” which the rule defines to include estimating software and benchmarks gathered from one or more databases.

A separate amendment to WAC 284-30-380(7) makes insurers responsible for the accuracy of their evaluations. Previously, that language applied specifically to actual cash value determinations.

Deadlines on mitigation scopes

Several other provisions affect restoration work directly. When a policy requires the policyholder to protect property from further damage after a loss, the insurer must approve the claimant’s scope of mitigation or provide an approved scope within five business days of receiving it.

If the insurer rejects the scope, it must disclose why the scope does not meet technical or industry standards and include a dollar-amount itemization of the disapproved items.

Claim files and coverage timelines

First-party claimants may now request any part of their claim file, and insurers have 15 business days to produce it. Law firms reviewing the rule note this includes estimates, bids, contractor reports, photographs and videos. Withholding is limited to privileged material, third-party financial information and information tied to suspected criminal activity.

Insurers must also accept or deny coverage within 30 days of notice of a claim, whether or not a proof of loss has been submitted. If an investigation cannot be completed in that time, the insurer must explain why in writing and send updates every 30 days.

The rules also bar insurers from requiring an appraiser to adjust a valuation during the appraisal process and prohibit repetitive information requests that delay a claim.

The full text of the amended rules is available through the Washington State Register under WSR 26-17-089.