Bill > HB2399

This bill aims to prohibit what are known as "post-loss assignment of benefits" in property insurance, meaning that after a loss occurs, a policyholder cannot transfer their insurance claim rights and benefits to a third party, such as a contractor. The bill defines an "assignment agreement" as any document that assigns or transfers post-loss benefits, including the right to sue the insurance company, to someone providing services related to the insured property. The legislature finds that these agreements can allow third parties to collect insurance payments without the policyholder's involvement, restrict communication, and even sue the insurer without the policyholder's consent, undermining the direct relationship between the policyholder and their insurer. While generally prohibiting these assignments, the bill makes exceptions for situations where a policyholder hires a licensed public adjuster to represent their financial interests, retains an attorney under a written agreement, assigns benefits to a financial institution or mortgagee, or in cases of liability coverage. It also clarifies that this prohibition does not prevent a policyholder from authorizing direct payment to a service provider. Violations of this restriction could result in a $50,000 fine per violation, to be paid to the state.

Business and Industry

https://app.leg.wa.gov/billsummary?BillNumber=2399&Year=2025&Initiative=false