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Bill

SB 5721

Enhancing consumer protections for automobile insurance coverage.

2025-2026 Regular Session Introduced by Emily Alvarado and 9 co-sponsors

Replaces disputes over auto damage values with a standardized, nonlitigation appraisal process: appraisers, an umpire, defined timelines; insureds share costs.

Effective date 7/27/2025.
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Bill Summary · SB 5721

SB 5721 — Enhancing consumer protections for automobile insurance coverage

Status: Chapter 394, 2025 Laws. Governor signed 5/20/2025. Law effective 7/27/2025. (Requirement applies to policies issued or renewed effective on or after 1/1/2026.)

Purpose

Require standardized appraisal provisions in automobile insurance policies that include first‑party physical damage coverage, to provide an accessible, non‑litigation dispute resolution process for disagreements over actual cash value and amount of loss on damaged vehicles.

Key provisions

  • Applicability: Every automobile insurance policy with first‑party physical damage coverage issued or renewed and effective on or after January 1, 2026, must include an appraisal clause meeting the statute’s requirements.
  • Appraisal clause required language (or equivalent, at least as favorable to the insured):
    • Either party may make a written demand for appraisal.
    • Within 10 days of the demand, each party must select a competent, disinterested appraiser and notify the other party.
    • Appraisers must each appraise the actual cash value and amount of loss, make separate findings for each element of loss, and exchange completed appraisals.
    • If appraisers disagree, they must appoint a competent, disinterested umpire and submit differences to the umpire.
    • If appraisers fail to appoint an umpire within 15 days, either appraiser may notify the Insurance Commissioner, who will identify a registered competent, disinterested umpire per rules the Commissioner adopts.
    • Appraisals must be completed within 30 calendar days of selection. If more time is needed, the appraiser must provide a reasonable basis to the other appraiser before day 25 and document the reason.
    • The amount of loss is determined by agreement of both appraisers or by agreement of one appraiser and the umpire; any agreement of two is binding.
    • Each party pays its own appraisal expenses; the parties share the umpire cost equally.
  • Definitions: The statute defines “appraiser,” “competent,” “disinterested,” and “umpire.”
  • Rulemaking: The Insurance Commissioner may adopt rules to implement the section.

Differences from earlier drafts

  • The final enacted version removed a provision in earlier drafts that would have required insurers to reimburse insureds’ appraisal costs when the appraisal award exceeded the insurer’s prior adjustment by $500 or more.
  • The final text does not retain a prohibition on demanding appraisal until 10 days after the insurer receives claim notice (that delay language was struck).

Who is affected

  • Insurers issuing automobile physical‑damage coverage in Washington: must include the mandated appraisal clause in applicable policies.
  • Policyholders (insureds): gain a standardized appraisal process to dispute valuation and loss amounts without immediate litigation.
  • Appraisers/umpires: subject to competence and disinterest standards; the Commissioner will register/identify umpires by rule.
  • Office of the Insurance Commissioner (OIC): rulemaking and administrative role in umpire identification.

Fiscal and procedural notes

  • No appropriation included; fiscal note available.
  • Law effective 7/27/2025; requirement applies to policies issued or renewed on/after 1/1/2026.
  • Sponsors: Senators Stanford, Valdez, Hasegawa, Riccelli, Alvarado, Nobles, Orwall, Slatter, Trudeau, and Wellman.

This law standardizes a neutral appraisal pathway intended to speed resolution of valuation disputes and reduce reliance on litigation or retained counsel, while assigning responsibilities and timelines for appraisers, umpires, insurers, and insureds.

Compiled from official sources — confirm details with the bill’s official record.

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