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Sen. Hunt’s Bill Would Bar Contractors From Taking Post‑loss Insurance Rights; OIC, Consumer Advocates Support
Summary
SB 6178 would make assignment agreements that transfer post-loss insurance benefits from homeowners to contractors void and unenforceable; the Office of Insurance Commissioner and consumer-advocate groups testified in support and the bill includes a $50,000-per-violation fine, though members asked about calibrating penalties and cooling-off periods.
Senate Bill 6178, which the Consumer Protection and Business Committee heard Feb. 18, would prohibit soliciting, coercing or contracting for post‑loss assignment of insurance benefits and make such assignment agreements void and unenforceable.
Senator Victoria Hunt (5th Legislative District), the bill’s sponsor, said the measure is aimed at protecting homeowners after disasters such as wildfires, when contractors may condition repairs on an assignment that transfers insurance claim control to the contractor. “The purpose of this bill is to make sure that those homeowners do stay in control of their insurance claim after a major incident like a wildfire,” Hunt said.
Rory Payne Donovan of the Office of Insurance Commissioner (OIC) testified that OIC has seen an uptick in consumer complaints where contractors pressured policyholders to sign assignment agreements before the insurer was contacted, sometimes resulting in misrepresentation, unauthorized work or loss of the homeowner’s ability to communicate directly with the insurer. OIC recommended the bill and described the proposed $50,000-per-violation penalty as intended as a deterrent; Donovan said OIC is open to discussing appropriate penalty levels and would conduct education if the bill passes.
Marian Smith of the National Insurance Crime Bureau and Catherine Knudson (attorney for the Washington State Association for Justice) also testified in support. Knudson described cases in which contractors took assignments of broad policy rights — including claims for alternate living expenses or extra-contractual remedies — and left homeowners without legal recourse because the contractor controlled those claims.
Committee members asked whether the penalty structure should distinguish between good‑faith and bad‑faith conduct or include graduated fines or cooling‑off periods; Senator Hunt said she would consult further with OIC and stakeholders. Staff noted the bill does not prohibit a homeowner from authorizing direct payment of proceeds to a contractor, a carve‑out the sponsor and witnesses emphasized.
The committee closed the public hearing on SB 6178 after receiving testimony.
