For Consumers

Rule proposed to require insurers tell you why your premium is going up

Contact Public Affairs: 360-725-7055

March 14, 2023

OLYMPIA, Wash. — A new regulation proposed by Washington state Insurance Commissioner Mike Kreidler 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,” said Insurance Commissioner Mike Kreidler. “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 straight answer on why they’re being charged more.”

The number one complaint we hear from consumers is that their auto or homeowners insurance premium is increasing, and their insurance company has not explained why. When the Office of the Insurance Commissioner asks the company, however, we get a more detailed response. 

We believe all consumers deserve an answer they can understand. 

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. 

We 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.

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

It 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. 

A public hearing on the rule takes place April 25, 2023 via Zoom and in our Tumwater office. Learn more about our efforts to increase rate transparency