For Consumers

Kreidler releases draft rule language requiring insurers to explain premium changes to policyholders

Contact Public Affairs: 360-725-7055

June 1, 2022

OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler has shared a draft rule that requires all property and casualty insurers selling personal lines of insurance — including auto, homeowners and renters insurance — to give their policyholders a simple breakdown of the reasons behind any future premium change.  

Consumers often contact Kreidler’s office when they receive a premium increase and their insurer hasn't given them a clear explanation why. In many cases, their insurer told them the inability to use credit scoring was driving up their premium. But when Kreidler’s office contacted the companies on behalf of the consumers, they received a more detailed explanation for the specific factors impacting the price change.  

“If you eat at restaurant or go to the grocery store, you get a receipt showing what you’ve paid for and what made up your total bill,” said Kreidler. “Why can’t your insurance company tell you the same type of information? There are many factors that determine how much you pay for insurance. You deserve to know what they are and what you can do to get a better rate.”

As currently drafted, the proposal would require insurers provide their policyholders with a “Premium Change Disclosure Notice” that explains the premium change and the dollar amount  or percentage of each factors’ impact on their new premium. For example, if you added a vehicle, filed a claim or had a change in your credit or insurance score, your company must tell you how much each item impacted your new premium. 

“Health insurers are required to explain rate changes to their policyholders,” said Kreidler. “They also have to tell you how much of the premium they’re collecting will go to pay claims. Yet, your auto insurer is not held to that standard. This rule will help consumers understand the cost drivers behind what they’re paying for auto or homeowner’s insurance. This is basic information, and frankly, I’m not sure why we didn’t require this transparency before.” 

Kreidler’s office is holding a public meeting on the draft proposal on June 14 at 9 a.m. via Zoom. Anyone interested in learning more should attend.