The Washington Office of the Insurance Commissioner (OIC) published a news release on the new premium change transparency rule required of insurers. The OIC has heard many consumer complaints regarding increased premiums. Consumers are saying they can't get clear answers from their insurers as to why their premiums are increasing. The new rule requires that home and auto insurers operating in the state explain to policyholders why their premiums have increased. The rule is the first of its kind in the country and will be enacted in two phases.
Phase 1 starts June 1, 2024, and requires that insurers include a disclaimer on the first page of renewal notices or billing statements informing policyholders that they can request more details about their premium increase. The policyholder can make a request through mail or email and the insurer should provide a reasonable explanation for the increase within 20 days.
Phase 2 starts June 1, 2027, and instead of needing policyholders to request information about their premium increase, that information should be included automatically. Insurers should send a notice at least 20 days before renewing a policy with more than a 10% increase in premium. A clear explanation and what factors caused the increase should be provided.
Factors can include claims history, discounts, fees and surcharges, premium capping, and base rate changes. Demographic factors can include the insured's age, credit history, education, gender, marital status, and occupation. In auto insurance, factors can include the vehicle's garaging location, driving record, miles driven, number of drivers, and number of vehicles. In homeowners insurance, factors can include the property's age, location, and value. The news release can be found here.