For Consumers

Rule adopted requiring insurers to tell you why your premium is going up

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June 21, 2023

OLYMPIA, Wash. — Washington state Insurance Commissioner Mike Kreidler has adopted a rule that requires insurance companies to explain premium increases to their policyholders in language they can understand. 

“If your insurance company is going to increase your premium, you have a right to know why,” Kreidler said. “This is pretty basic information you should expect from your insurance company, but we hear from hundreds of consumers every year who cannot get a clear, understandable answer on why they’re being charged more.”

When consumers’ auto or homeowners insurance premium goes up, and the insurance company hasn’t explained why, consumers contact the Office of the Insurance Commissioner (OIC). When the OIC asks on their behalf, it gets a more detailed response — and Kreidler believes consumers deserve the same information. 

The OIC held five meetings with interested parties over the last year to understand why providing better transparency on premium changes was needed and to hear from the insurers directly. 

It learned that some insurers’ rating formulas have become so complex, they can’t readily specify the reasons behind someone’s premium change. Some insurers’ computer systems are unable to generate a clear answer.

The new rule creates more transparency for consumers and gives the insurers sufficient time to implement the new consumer protections in two phases. 

The rule applies to all property and casualty insurers in Washington state that sell private passenger auto and homeowners coverage, including coverage for manufactured homes, condominiums and renters. 

From June 1, 2024, to June 1, 2027:

  • When a policy renews and the premium increases, insurance companies must give policyholders who ask reasonable explanations using terms they can understand. 

Starting June 1, 2027:

  • Insurance companies must provide a written notice to policyholders who received a premium increase of 10% or more explaining the primary factors behind the increase. They must also provide this same notice to any policyholder who asks. 
  • Primary factors include: the vehicle’s location, driving record, miles driven, number of drivers, claims history, discounts, fees and surcharges, the driver’s age, credit history, education, gender, marital status, occupation, property age, and value. 

Learn more about our efforts to increase rate transparency.