Galina Kletser Jakobson, Luisa Taddeo and Jonah M. Haseley | Freeman Mathis & Gary
The Washington State Office of the Insurance Commissioner (“OIC”) recently adopted changes to Washington’s Unfair Claims Settlement Practices Regulation, which went into effect on October 18, 2026. See Wash. Admin. Code (“WAC”) 284-30-300 to -395. These amendments carry significant ramifications for insurance carriers that do business in Washington.
The OIC expressly tied the amendments to consumer complaints and growing dissatisfaction with how insurers handle claims. According to the OIC, although the total number of automobile and homeowners’ insurance claims in Washington remained consistent over the preceding six years, the OIC saw a marked increase in consumer complaints and Insurance Fair Conduct Act (“IFCA”) notices, reflecting consumer dissatisfaction with claims handling and a growing willingness to sue insurers.
The OIC stated that this spike in consumer complaints and IFCA notices indicates potential insurance code violations and an increase in unfair or deceptive claims-handling practices under Washington law. See WSR 26-17-089 (filed Aug. 18, 2026). The OIC also pointed to a 2023 public workshop held in response to a historic increase in complaints—more than 80 percent of which cited claims-handling issues—as well as reports of delays and inaccuracies in claim payments and the industry’s shift from in-person loss inspections toward artificial intelligence and photo-based adjusting.
Claimants’ counsel can be expected to rely on this stated purpose to argue that the amended regulations should be read broadly in favor of consumers, and to frame alleged deviations from the regulations as the precise conduct the OIC sought to curb.
Key Amendments
Critical changes include, but are not limited to, the following:
- Limits on reliance on databases and estimating software: Insurers may no longer rely solely on databases or estimating software to conduct a reasonable investigation of a claim. If an insurer chooses to use such databases or software for material or labor pricing, the claimant can request, and the insurer is now obligated to provide information about the underlying data.
- Prohibition on duplicative document requests: Insurers risk liability if they delay the investigation or payment of a claim by requesting additional documentation if the insurer already possesses that documentation. The rule now applies not only to first-party claimants and their physicians, but also to all of the claimant’s service and medical providers.
- Obligation to produce records: The amended regulations require insurers to produce portions of a policyholder’s file within 15 business days of the request.
- Deadline for mitigation scope: Within 5 business days after receiving the scope of mitigation from a first-party claimant, the insurer must approve the scope of mitigation or describe what mitigation is necessary. If the insurer rejects the claimant’s scope of mitigation, it must explain why, including an itemization, by dollar amount, of disapproved items.
- Shortened deadline for responding to the OIC: The deadline for responding to an OIC inquiry has been shortened from 15 business days to 10 business days.
- Revised deadlines for accepting or denying claims: Within 30 calendar days after receiving notification of a claim, the insurer must notify the policyholder whether it accepts or denies the claim. If the insurer needs more time, the follow-up period is now reduced from 45 to 30 calendar days.
Likely Implications for Litigation Against Insurers
In Washington, claims-handling regulations are not merely a compliance checklist—they are the standards against which insurers are judged in extra-contractual litigation. IFCA authorizes enhanced damages of up to three times actual damages and an award of attorneys’ fees and costs, RCW 48.30.015, and requires a claimant to provide written notice to the insurer and the OIC at least 20 days before filing suit, RCW 48.30.015(2)–(3), (8)(a).
Because the amendments fall largely within the sections expressly incorporated into IFCA, each new deadline and disclosure obligation effectively becomes a potential IFCA predicate. Although the Washington Supreme Court has held that IFCA does not create an independent cause of action for a regulatory violation absent an unreasonable denial of coverage or benefits, Perez-Crisantos v. State Farm Fire & Cas. Co., 187 Wn.2d 669, 389 P.3d 476 (2017), once a claimant establishes an unreasonable denial, regulatory violations remain highly relevant to trebling and fees. Likewise, a violation of the unfair claims settlement practices regulations satisfies the first element of a Consumer Protection Act claim as a per se unfair or deceptive act, Indus. Indem. Co. of the Nw., Inc. v. Kallevig, 114 Wn.2d 907, 792 P.2d 520 (1990), and the regulations routinely inform the standard of good faith in common-law bad-faith claims, including claims premised on an inadequate investigation regardless of whether coverage ultimately exists, Coventry Assocs. v. Am. States Ins. Co., 136 Wn.2d 269, 961 P.2d 933 (1998). In short, more specific, bright-line rules mean more readily provable violations.
We expect the amendment with the greatest impact on future bad-faith litigation to be the claimant’s new right to request portions of the claim file pre-suit, which insurers must produce within 15 business days. Historically, many IFCA notices have been general in nature, drafted with limited insight into the insurer’s investigation.
With early access to adjuster notes, estimates, correspondence, and the pricing data underlying any software-generated estimate, claimants’ counsel will now be able to draft IFCA notices that identify specific alleged regulatory violations, dates, and dollar amounts, effectively previewing the complaint before formal discovery begins. Claimants may also time their claim file requests to precede or coincide with the IFCA notice, and any failure to produce within the 15-business-day deadline may itself be cited in the notice as an additional violation. At the same time, a more detailed notice gives insurers a more concrete opportunity to evaluate and resolve the claim within the 20-day notice period.
Insurers should therefore treat a claim file request as a potential precursor to an IFCA notice and ensure that claim notes are accurate, complete, and professional, and that privileged materials are identified before production.
While these changes do not relieve claimants of their burden of proof, we expect claimants’ counsel to argue that these regulations impose heightened duties on insurers toward claimants, effectively attempting to shift the burden to insurers to establish compliance with the amended regulations. We also expect claimants to argue that the amended regulations govern claims that were open prior to the amendments’ effective date of October 18, 2026. Accordingly, early case assessments should include a timeline audit of the claim file against the applicable regulatory deadlines, so that potential exposure for trebled damages and fee-shifting can be factored into reserving, settlement, and litigation strategy.
Insurers will need to consider whether their technology and communications practices comply with the amended regulations and adjust as necessary to ensure they are meeting the new deadlines. Because these amendments are new, courts have not yet had the opportunity to interpret them. More information will become available as cases make their way through the courts. We will continue to monitor how Washington courts apply the amended regulations and will provide updates as decisions emerge.
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 801.641.8304, or email experts@adviseandconsult.net.