Hello? – Fire insurance reform failed in Olympia

Our state Legislature is controlled by Democrats. They like to tout an abiding affinity for solving the manifold troubles imposed on the American consumer by the American oligarchy’s often unfair corporate business practices.

Yet in the last legislative session — against the backdrop of a climate-driven homeowners’ insurance crisis — five Democratic bills that would have provided consumer protections against unfair insurance industry shenanigans died in the House. (All passed in the Senate.)

The House Consumer Protection and Business Committee, chaired by Kirkland’s Rep. Amy Walen of the 48th District, kept the bills from coming to a floor vote.

Only six Republicans sit on Walen’s 15-member committee. The Legislature, alas, allows itself to vote on We the People’s business during executive sessions of legislative committees. So assigning personal responsibility for political malpractice can be difficult.

Admittedly, this is hardly a charitable reading. But could it possibly be that these committee members are unaware of the wildfire-driven crisis in homeowners’ insurance — skyrocketing premium costs and cancellations — in eastern Washington? If so, the recent loss of some 900 structures in Spokane may awaken them to focus on the urgent matters of insurance and wildfire.

Walen proved unreachable for clarification, and it’s difficult to say whether these bills were judged too protective of consumers or too acquiescent to insurers. There’s a well-founded fear in Olympia of passing insurance regulations so stringent that they cause insurers to flee the state, as Allstate and State Farm did in 2003 in California after wildfire losses caused profits to plunge.

What we can say with surety is that Walen chairs a committee answerable not only to business interests but to the state’s consumers.

Walen did get her own consumer protection bill out of her committee and passed by the House. It strengthens consumer protections against insurers who want to cancel pet insurance.

The Senate, perversely, was having none of it. But Walen vowed to persist. “Unfortunately, my bill protecting pet insurance cancellation (HB 1078) failed in the Senate, but we will tackle that next session,” she promised on her website.

Forgive me. Why do I wish I were making this up? Hello? Let’s think positively, people. Hope for the same persistence from this committee on behalf of consumers facing cancellation of homeowners insurance as for cancellation of their pet insurance.

A look at the bills

Were these bills worthy of passage? Judge for yourself. Here’s what state Insurance Commissioner Patty Kuderer’s website says about them:

SB 5928 would have required insurers to disclose the risk scoring system used to evaluate properties for exposure to fire and other risks, eligibility for coverage, pricing and renewals, and to explain factors behind the scores, plus provide “plain-language steps” consumers can take to improve their scores.

If consumers have done mitigation work to reduce fire risks since the last evaluation, or there are demonstrable inaccuracies with an insurer’s current evaluation, consumers were assured of the right to appeal.

Seems fair to me.

SB 5331, opposed by the insurance industry, would have given the insurance commissioner’s office authority that insurers already tolerate in 37 states. It would assess higher fines for violations of the state’s insurance laws and align the scope of these fines with those imposed on other state-regulated entities. Fines levied on insurers, now capped at up to $10,000 per event, would rise to up to $10,000 per each violation during an event.

Long overdue.

SB 6079, “Strengthen Washington Home,s” was a grant pilot program proposed by Insurance Commissioner Kuderer to retrofit existing homes of owners facing non-renewal or difficulties finding insurance due to wildfire risks.

It would have required adherence by homeowners and their contractors to the Insurance Institute for Business and Home Safety’s (IBHS) Wildfire Prepared Home standards, recently introduced in Washington.

IBHS “upgrades help protect not only homes and communities but access to insurance coverage,” according to Kuderer. “With climate change increasing, and intensifying wildfire threats, these standards are a smart, responsible way to mitigate that risk,” she said.

This science-tested fire mitigation program may prove to be homeowners’ best defense against wildfire losses and loss of insurance. It requires fire-hardening upgrades of homes to be certified by a third party. It’s unclear if the insurance industry will accept the certifications as valid enough to issue policies.

SB 6031 defined insurance fraud as its own crime in state law, expanded “victims of insurance fraud” to include consumers and made insurance beneficiaries eligible for criminal restitution. Fraud included billing an insurance company or a consumer for services not provided.

No-brainer.

SB 6178 would have protected consumers from losing control of loss payouts from insurers to third parties. It prohibited consumers from signing agreements with contractors or others that would allow insurers to directly disburse payments to a third party. Nationally, this practice has been abused after natural disasters and led to inflated claims and higher insurance premiums, according to the insurance commissioner.

Ditto.

These bills are expected to be re-introduced next session, according to Aaron VanTuyl, spokesman for Kuderer, a former 48th District senator.

Kuderer meanwhile is scheduled to hold a town hall meeting in Winthrop the evening of Oct. 19, according to VanTuyl.

Kuderer is visiting the state’s wildfire-threatened areas to answer insurance questions, discuss fire mitigation and explain her efforts to create the grant program for owners whose existing homes need to be fire-hardened.

Might be worth the trouble to attend.

Solveig Torvik lives in Winthrop.

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