Insurance premiums for Washington residence has risen over $200 million over a two year period according to an article published in the Bellingham Herald. The article goes on to state:
Insurance claim costs for Washington residents have increased by more than $200 million over a two-year period, according to a new study released by the Insurance Research Council (IRC). An estimated $190 million of the increase is attributed to effects on Homeowners Insurance claims due to the Insurance Fair Conduct Act, commonly known as R-67. Key factors include insurers limiting fraud investigations and paying questionable claims rather than risk potentially unlimited punitive damages.
I am a little shocked that the author, John Stark, failed to do some research into the Insurance Fair Conduct Act (IFCA). First, IFCA does not grant “unlimited punitive damages.” Instead, it allows a judge to treble a policyholders damages. So, if an insurance company wrongly denies a claim worth $25,000, then the punitive damages can only be $75,000. The act is designed to make wrongly denying insurance claims a unprofitable venture for insurance companies.
I would like more non bias research done in this area. Does IFCA make it expensive for insurance companies to do business in Washington? Does that in turn raise the insurance premiums for Washington residences? Are there other causes to raising insurance premiums that have nothing to do with enacted laws?