Washington HB 2399: Prohibiting the post-loss assignment of benefits in property insurance.

Bill Text

AN ACT Relating to prohibiting the post-loss assignment of 1
benefits in property insurance; adding a new section to chapter 48.30 2
RCW; and creating a new section.3
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:4
NEW SECTION. Sec. 1. The legislature finds that a post-loss 5
assignment of benefits in property claims is a contractual agreement 6
that, once signed, transfers the insurance claim rights and benefits 7
within the policyholder's insurance policy to a third party. This 8
contractual arrangement usually involves a restoration or mitigation 9
contractor doing some, or all, of the repairs of the covered 10
property. This assignment agreement is different than the 11
policyholder authorizing direct payment to the restoration or 12
mitigation contractor from the insurance company. It is also 13
different than the assignment clause found in the conditions section 14
within a property policy that prohibits the policyholder from 15
assigning the policy to another entity unless approved by the 16
insurance company.17
The legislature further finds that a post-loss assignment 18
agreement can allow, but not limit, the third party to: Collect 19
insurance payments without the involvement of the policyholder; 20
restrict communications on the claim to prohibit the policyholder's 21
Z-0530.2
HOUSE BILL 2399
State of Washington 69th Legislature 2026 Regular Session
By Representatives Hackney, Berry, Ormsby, and Zahn; by request of
Insurance Commissioner
Read first time 01/13/26. Referred to Committee on Consumer
Protection & Business.
p. 1 HB 2399

involvement; and sue the insurance company without the consent of the 1
policyholder.2
The legislature finds that the basis of the relationship between 3
the policyholder and the policyholder's insurance company is one 4
affected by the public interest. The consumer protections in claims 5
handling as set forth in the insurance code are intended for the 6
benefit of the policyholder. Therefore, it is the intent of the 7
legislature that the policyholder be the entity that has control of 8
the policyholder's property claim with the policyholder's insurer.9
NEW SECTION. Sec. 2. A new section is added to chapter 48.30 10
RCW to read as follows:11
(1) No person shall solicit, coerce, require, or contract with 12
any insured to enter into an assignment agreement, in whole or in 13
part, whereby any post-loss insurance benefit under any property 14
insurance coverage is assigned or transferred from the insured to the 15
person. Such assignment agreement is void and unenforceable.16
(2) The restriction in subsection (1) of this section does not 17
apply to any of the following:18
(a) An insured retaining the services of a licensed public 19
adjuster under a written agreement to represent solely the 20
policyholder's financial interest on the loss;21
(b) An insured retaining the services of an attorney under a 22
written agreement that compensates the attorney based on a percentage 23
of a monetary recovery as permitted by the rules of professional 24
conduct;25
(c) An assignment, transfer, pledge, or conveyance granted to a 26
federally insured financial institution, mortgagee, or subsequent 27
purchaser of the property; or28
(d) Liability coverage under a personal or commercial line 29
insurance policy.30
(3) Nothing in this section is construed to prohibit an insured 31
from authorizing or directing payment to, or paying, a person for 32
services, materials, or any other thing which may be, or is, covered 33
under an insurance policy.34
(4) If the commissioner has cause to believe that any person has 35
violated the restriction in subsection (1) of this section the 36
commissioner may take any of the actions under RCW 48.02.080 and 37
impose a fine of $50,000 per violation. Any fine collected by the 38
p. 2 HB 2399

commissioner under this section must be paid to the state treasurer 1
for the account of the general fund.2
(5) For the purposes of this section, the following definitions 3
apply:4
(a) "Assignment agreement" means any instrument, by which post-5
loss benefits under any property insurance coverage including, but 6
not limited to, any right of action against the insurer or any 7
proceeds acquired from the insurer, are assigned or transferred to a 8
person providing services to the insured including, but not limited 9
to, inspecting, protecting, repairing, restoring, constructing, or 10
replacing the insured's property or mitigating the insured's property 11
against further damage;12
(b) "Property insurance" has the same meaning as defined in RCW 13
48.11.040; and14
(c) "Public adjuster" has the same meaning as defined in RCW 15
48.17.010.16
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p. 3 HB 2399