Bill > HB2553

This bill aims to protect homeowners by establishing new rules for how insurance proceeds are handled when there's a property insurance claim on a home with a mortgage. Specifically, if an insurance company recommends a contractor, that contractor cannot demand upfront payments exceeding the homeowner's deductible or the amount of insurance money already released to the homeowner by their lender (the mortgagee or assignee). Furthermore, for residential mortgage loans taken out on or after January 1, 2027, insurers must generally pay at least half of the property insurance proceeds directly to the homeowner, with the rest potentially going to both the homeowner and the lender, unless the lender's loan is a small portion (25% or less) of the property's value and is current, in which case all proceeds go to the homeowner. The bill also requires lenders who receive insurance money for things like contents or additional living expenses, where they don't have a claim on those items, to promptly give that money to the homeowner. Additionally, if repairs to the property have been completed and approved, lenders holding insurance proceeds must release the applicable payment to the homeowner within two business days.

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https://app.leg.wa.gov/billsummary?BillNumber=2553&Year=2025&Initiative=false