Engrossed Senate Bill 5721 — State of Washington, 69th Legislature, 2025 Regular Session

Summary

Engrossed Senate Bill 5721 of the State of Washington, 69th Legislature, 2025 Regular Session, referred to the Committee on Business, Financial Services & Trade. The bill is an act relating to enhancing consumer protections for automobile insurance coverage. It requires every automobile insurance policy that includes first-party coverage for physical damage, issued or renewed effective on or after January 1, 2026, to include a right to an appraisal to resolve disputes about the actual cash value and amount of loss on the damaged automobile. The appraisal language says the insurance company will reimburse the policyholder for appraisal costs if the amount of loss determined is greater by $500 or more.

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Full text

                           ENGROSSED SENATE BILL 5721


     State of Washington        69th Legislature        2025 Regular Session

     By Senators Stanford, Valdez, Hasegawa, Riccelli, Alvarado, Nobles,
     Orwall, Slatter, Trudeau, and Wellman

     Read first time 02/10/25.      Referred   to   Committee   on   Business,
     Financial Services & Trade.




 1       AN ACT Relating to enhancing consumer protections for automobile
 2   insurance coverage; and adding a new section to chapter 48.18 RCW.


 3   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:


 4       NEW SECTION.   Sec. 1.  A new section is added to chapter 48.18
 5   RCW to read as follows:
 6       (1) Every automobile insurance policy that includes first-party
 7   coverage for physical damage issued or renewed effective on or after
 8   January 1, 2026, must include a provision for the right to an
 9   appraisal to resolve disputes between the insurer and the insured
10   regarding the actual cash value and amount of loss on the damaged
11   automobile. The appraisal clause must include the following language,
12   or corresponding language that the insurer certifies is at least as
13   favorable to the insured:

14       "If . . . (the insurance company) . . . and . . . (the
15   policyholder) . . . are unable to agree as to the amount of loss,
16   either party may make a written demand for an appraisal, and within
17   10 days each party shall select a competent and disinterested
18   appraiser and notify the other party of its selection.
19       The appraisers shall then each appraise the actual cash value and
20   the amount of loss, make separate findings regarding the amount of

                                      p. 1                            ESB 5721
 1   loss for each element of loss, and exchange their completed
 2   appraisals. If the appraisers are unable to agree on the losses, the
 3   selected appraisers shall appoint a competent and disinterested
 4   umpire and submit their differences to the umpire. If the appraisers
 5   do not appoint a competent and disinterested umpire within 15 days,
 6   either appraiser may notify the commissioner, and the commissioner
 7   shall identify a registered competent and disinterested umpire that
 8   will be used according to the process that the commissioner specifies
 9   by rule.
10       The appraisers must make their appraisals within 30 calendar days
11   of selection. If an appraiser needs more than 30 days, the appraiser
12   shall provide a reasonable basis to the other appraiser before 25
13   days has passed. The appraiser must document the reason or reasons
14   for the extension in their file.
15       The amount of loss must be determined either by agreement of the
16   appraisers or by agreement of one appraiser and the umpire.
17       Each party is responsible for their appraisal expenses, and each
18   party is equally responsible for the cost of the umpire.
19       If the amount of loss determined through the appraisal process is
20   greater than the amount of loss . . . (the insurance company) . . .
21   adjusted before the appraisal process was invoked by an amount of
22   $500 or more, . . . (the insurance company) . . . will
23   reimburse . . . (the policyholder) . . . for the costs incurred for
24   the appraisal process.
25       The   appraisal  process   costs   include  reasonable  appraiser
26   professional charges, reasonable attorneys' fees, and other necessary
27   actual costs."

28       (2) Neither party may demand an appraisal until 10 days after the
29   insurer receives notification of the claim.
30       (3) For purposes of this section, the following definitions
31   apply:
32       (a) "Appraiser" means a person selected by the insurer or the
33   insured to place a value on or estimate the amount of loss under an
34   appraisal clause in an insurance contract;
35       (b) "Competent" means the person has subject matter expertise,
36   relevant training, and experience to make decisions and valuations
37   relating to the amount of loss;
38       (c) "Disinterested" means the person does not have a direct
39   financial interest in the outcome of the appraisal process; and

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1       (d) "Umpire" means a person selected by the appraisers
2   representing the insurer and the insured, or, if the appraisers
3   cannot agree, by the commissioner, who is charged with resolving
4   issues that the appraisers are unable to agree upon during the course
5   of an appraisal.
6       (4) The commissioner may adopt rules as necessary to implement
7   this section.

                                 --- END ---




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