The Washington House Consumer Protection and Business Committee approved an amended right-to-appraisal bill Wednesday. 

SB5721 would require insurance policies to include a provision that gives policyholders the right to an appraisal to resolve disputes about the actual cash value and amount of loss on a damaged vehicle.

The amended version strikes language that required the insurance company to reimburse the policyholder for the appraisal process if the loss determined through the process is $500 or more than what the insurance company adjusted. 

Next, the bill will need to be passed by the House. It was previously passed in the Senate in early March.  The bill will have to go back to the Senate with the amendment for approval before being sent to the Governor.

Justin Lewis, president of the Washington Independent Collision Repair Association (WICRA), said Wednesday that WICRA representatives met with insurance lobbyists Tuesday to agree on the amendment. 

“I don’t think either [side]are extremely happy but happy to get something done,” Lewis said about those who met Tuesday. “Any win is a win when it comes to legislation. If we can get some victory, it is better than no victory.” 

Lewis said there was concern the bill wouldn’t pass the House Committee without pulling the reimbursement language. Failing to pass the committee would have stalled the bill for the legislative session.

“It provides a better protection from what we had,” Lewis said. “We are getting something better. It is better than getting nothing.” 

Committee Chairman Rep. Amy Walen (D-48) praised each side for their productive negotiations ahead of Wednesday’s vote. 

“I really appreciate the appearance of hard-working people and collision centers from around our state that came to Olympia twice and spent some time in this committee room,” Walen said. 

Rep. Jeremie Dufault (R-15) was the only member of the committee to speak against the bill ahead of its vote. 

“We’re still very concerned about the potential increase in insurance premiums for consumers in Washington state,” Dufault said. “I do recognize and appreciate the work that was done on the amendment to mitigate some of that risk, but I still believe it’s out there. We’ve seen our insurance rates go up pretty dramatically in the state and we’re very concerned that any pulling on any threads on this sweater could have significant negative impacts for consumers.”

More than 28 members of WICRA attended a House Committee public hearing on the bill Tuesday. 

Five consumers also spoke in favor of the bill. 

“I had an incident with my car last October,” a consumer testified. “I’m still fighting with the insurance company, trying to get them to step up. They initially awarded my case a $9,000 appraisal. It ended up being well over three times that amount, and I’m still fighting with them to try to get that taken care of.” 

The consumer said the insurance company hasn’t explained why they won’t pay the full amount. 

“They hired a third-party appraiser who came in and sided completely with the body shop and still, it’s costing me thousands of dollars to get my car fixed and to get my car back,” the consumer said. “It’s been just a horrendous experience, and again, no explanation from the insurance company.” 

Rose Gunderson, VP of operations for the Washington Retail Association, spoke in favor of the bill. 

“Many of our members are collision shops, and they’re small business owners who have family-like relationships with their customers, so my testimony also covers their customers and their interests,” Gunderson said. “Differences in repair cost appraisals often happen, but the likelihood for a policyholder to invoke this is rare. It’s only going to happen unless the differences are so unreasonable that they’re willing to go through the financial and emotional burden of going through this excessive process. I want committee members to really consider that and understand that this is a consumer protection.” 

Representatives with the Office of the Insurance Commissioner and Washington State for Justice also spoke in favor of the bill. 

Lewis described the consumer experience to the committee during Tuesday’s hearing. 

“The shop fully disassembles the vehicle to assess the damage and submits a repair plan with documentation to both the owner and the insurer,” Lewis said. “Then we wait, often three to 10 days sometimes for a response. These delays can happen again and again and are usually routine. They force our customers to exhaust their rental coverage.”

Repair plans are often rejected, including necessary procedures to safely repair vehicles, he said. He said insurers oftentimes provide vague explanations for rejecting the plans. 

“In the end, consumers are forced to pay out of pocket to get a proper and safe repair,” Lewis said. “Today’s vehicles are much safer than ever, but they’re only safe if they’re repaired correctly. Advanced materials and crash systems must be restored exactly to manufacturer standards to protect passengers and those on the road with them.”

Jeff Butler, a public and independent adjuster who owns Collision Consulting of Washington, told the committee he receives weekly calls from consumers who have received a low settlement from an insurance company. 

“Even when there are flagrant violations of the rules, I’m unable to help some of these people because a $1,500 shortage on a $9,000 car eats their proceeds and it is inequitable for them to fight,” Butler said. “For repairable vehicles, it’s far more difficult. Nearly 100% of the time today, the opposing appraiser I go up against will never inspect the vehicle in person. They shift the claims adjusting burden to me because I’m the boots on the ground.” 

Butler said most insurance policies don’t have an umpire option and the only option is to go to court. 

Kris Tefft, on behalf of the American Property Casualty Insurance Association (APCIA), said during the Tuesday meeting that he hoped to come to an agreement for an amendment that removed the reimbursement language. 

“In our members’ view, the bill as written does not, in several instances, align the incentives the way we think they should be aligned to encourage fair, fast dispute resolution,” Teftt said. 

Kenton Brine, president of the Northwest Insurance Council, also said during the Tuesday hearing that he hopes to come to an agreement on an amendment.

“In its current form, 5721 represents significant and unnecessary changes in law that we fear would lead to more disputes, not fewer,” Brine said. “We see the Senate bill, as it’s currently before you, as having the potential to result in longer delays in repair times and higher costs for both repairs and total loss settlements, which of course contributes to higher insurance costs for insurers and consumers, which no Washington auto insurance consumer wants, especially right now.” 

A representative with the National Association of Mutual Insurance Companies also spoke against the bill in its previous state.

IMAGE

Feature image of Washington House Consumer Protection and Business Committee Chairman Rep. Amy Walen (D-48) speaks during a meeting April 2/screenshot. 

Washington Independent Collision Repair Association (WICRA) members at Washington State Capital April 1/WICRA