Senate Bill 6178 - Prohibiting Post-Loss Assignment of Benefits in Property Insurance (Washington, 2026)

Summary

Senate Bill 6178, State of Washington, 69th Legislature, 2026 Regular Session, by Senators Hunt, Cortes, Frame, and Nobles, by request of Insurance Commissioner, read first time 01/15/26. Its title relates to prohibiting the post-loss assignment of benefits in property insurance and adds a new section to chapter 48.30 RCW. The first section sets out legislative findings about post-loss assignment agreements. A later section provides that no person shall solicit, coerce, require, or contract with any insured to enter into such an assignment agreement, which is void and unenforceable, lists exceptions such as a licensed public adjuster and an attorney, and lets the commissioner impose a fine of $50,000 per violation.

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Full text

     Z-0531.2

                                 SENATE BILL 6178


     State of Washington         69th Legislature      2026 Regular Session

     By Senators Hunt, Cortes, Frame, and Nobles; by request of Insurance
     Commissioner

     Read first time 01/15/26.   Referred to Committee on Business, Trade &
     Economic Development.




1        AN ACT Relating to prohibiting the post-loss assignment of
2    benefits in property insurance; adding a new section to chapter 48.30
3    RCW; and creating a new section.


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


 5       NEW SECTION.    Sec. 1.   The legislature finds that a post-loss
 6   assignment of benefits in property claims is a contractual agreement
 7   that, once signed, transfers the insurance claim rights and benefits
 8   within the policyholder's insurance policy to a third party. This
 9   contractual arrangement usually involves a restoration or mitigation
10   contractor doing some, or all, of the repairs of the covered
11   property.   This   assignment   agreement  is   different than   the
12   policyholder authorizing direct payment to the restoration or
13   mitigation contractor from the insurance company. It is also
14   different than the assignment clause found in the conditions section
15   within a property policy that prohibits the policyholder from
16   assigning the policy to another entity unless approved by the
17   insurance company.
18       The legislature further finds that a post-loss assignment
19   agreement can allow, but not limit, the third party to: Collect
20   insurance payments without the involvement of the policyholder;
21   restrict communications on the claim to prohibit the policyholder's
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1    involvement; and sue the insurance company without the consent of the
2    policyholder.
3        The legislature finds that the basis of the relationship between
4    the policyholder and the policyholder's insurance company is one
5    affected by the public interest. The consumer protections in claims
6    handling as set forth in the insurance code are intended for the
7    benefit of the policyholder. Therefore, it is the intent of the
8    legislature that the policyholder be the entity that has control of
9    the policyholder's property claim with the policyholder's insurer.

10       NEW SECTION.   Sec. 2.   A new section is added to chapter 48.30
11   RCW to read as follows:
12       (1) No person shall solicit, coerce, require, or contract with
13   any insured to enter into an assignment agreement, in whole or in
14   part, whereby any post-loss insurance benefit under any property
15   insurance coverage is assigned or transferred from the insured to the
16   person. Such assignment agreement is void and unenforceable.
17       (2) The restriction in subsection (1) of this section does not
18   apply to any of the following:
19       (a) An insured retaining the services of a licensed public
20   adjuster under a written agreement to represent solely the
21   policyholder's financial interest on the loss;
22       (b) An insured retaining the services of an attorney under a
23   written agreement that compensates the attorney based on a percentage
24   of a monetary recovery as permitted by the rules of professional
25   conduct;
26       (c) An assignment, transfer, pledge, or conveyance granted to a
27   federally insured financial institution, mortgagee, or subsequent
28   purchaser of the property; or
29       (d) Liability coverage under a personal or commercial line
30   insurance policy.
31       (3) Nothing in this section is construed to prohibit an insured
32   from authorizing or directing payment to, or paying, a person for
33   services, materials, or any other thing which may be, or is, covered
34   under an insurance policy.
35       (4) If the commissioner has cause to believe that any person has
36   violated the restriction in subsection (1) of this section the
37   commissioner may take any of the actions under RCW 48.02.080 and
38   impose a fine of $50,000 per violation. Any fine collected by the


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 1   commissioner under this section must be paid to the state treasurer
 2   for the account of the general fund.
 3       (5) For the purposes of this section, the following definitions
 4   apply:
 5       (a) "Assignment agreement" means any instrument, by which post-
 6   loss benefits under any property insurance coverage including, but
 7   not limited to, any right of action against the insurer or any
 8   proceeds acquired from the insurer, are assigned or transferred to a
 9   person providing services to the insured including, but not limited
10   to, inspecting, protecting, repairing, restoring, constructing, or
11   replacing the insured's property or mitigating the insured's property
12   against further damage;
13       (b) "Property insurance" has the same meaning as defined in RCW
14   48.11.040; and
15       (c) "Public adjuster" has the same meaning as defined in RCW
16   48.17.010.

                                  --- END ---




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