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Washington’s rules about insurance misrepresentation

On Behalf of | Nov 17, 2022 | Insurance Law |

Washington residents may take out a variety of insurance policies, including renter’s, homeowner’s, auto, and commercial liability. Washington state law established rules that an insurance company must follow when selling a policy and assuming a client’s risk. Insurance companies could face a lawsuit along with sanctions when they engage in misrepresentation.

Rules for insurance policies

Washington state law notes clear rules regarding insurance company misrepresentation. Per the law, an insurance company must provide detailed information about a policy’s provisions, benefits and coverages. An insurance company cannot attempt to conceal benefits, coverages and provisions when such elements are vital to filing a claim.

Denying a claim based on failure to exhibit property is dubious and illegal when the insurance company does not ask for proof, or the claimant refuses to provide any proof. Putting time limits on the requirements to file a claim is illegal unless the time limit clause originally appeared in the policy. Also, time limits that infringe on the insured rights are not allowed under the law.

Other insurance matters

Washington state insurance law statutes further address misrepresentation regarding signing releases and rules regarding a possible request for reimbursement. Insurers may not issue a partial payment with an agreement that the insured will release the insurer from its total liability obligations.

An insurance company does not have to pay for something noted as excluded in the policy, nor does it have to pay fraudulent claims. However, insurance providers are expected to respond in good faith to legitimate claims covered under the policy.

Insurance statutes cover other rules regarding bad faith and subrogation. Subrogation could help insurance companies since the process allows then to seek a way to recover their claim payouts from a liable party.