In 2007, the Insurance Fair Conduct Act (IFCA) RCW 48.30.015 became law in Washington. It was a much-needed reform that attempted to level the playing field between consumers and the multi-billion dollar insurance industry. It is a pro-consumer law that was strongly opposed by the insurance companies. In fact, they spent millions of dollars lobbying against it. The law protects you, the consumer, from the wrongful actions of your own insurance company.
What Does It Do?
Who Does It Help?
If an insurance company unreasonably denies or underpays a claim by a first-party claimant, except in the case of a health plan offered by a health carrier, then the law applies. Who is a First-Party Claimant?
An example would be a claim by a corporation or LLC for property damage to a building covered by a commercial or business owner’s policy or an owner’s claim for damage to their house or contents covered by a homeowners policy. It could also be the beneficiary of life or accidental death policy.
What Do You Do if You Think Your Insurance Company is Wrongly Underpaying or Denying Your Claim?
This is a complicated area of the law, and the insurance companies have thousands of lawyers that work to defend them from claims. Hiring a knowledgeable lawyer who represents people and businesses against insurance companies on a contingency fee basis is a good first step. The language in your insurance policy is complex. There are thousands of court decisions that have interpreted the language in insurance policies. The insurance adjuster handling your claim may or may not know what the policy language means. In either case, they may deny legitimate claims or underpay those that they cover. It is not likely that the insurance company will correct its mistakes if you do nothing. Take action!
Step 1 - Notice to Your Insurance Company and the Insurance Commissioner is Required!
The Washington State Office of the Insurance Commissioner provides a form to be used to give notice to insurance companies that a claim is being made under IFCA. Service of the Notice can be made in several ways; however, sending it using Certified Mail, Return Receipt Requested provides proof that you actually sent it and that it was received. Keep a copy of your Notice and the Return Receipts to prove you served it as required. You are required to send a copy to both your insurance company and the Office of the Insurance Commissioner. Make sure to indicate on the form the basis for your claim. Unless you are very familiar with the Washington Administrative Code and the insurance statutes, it might be helpful to seek legal assistance to make sure that this is done correctly. If it is not done correctly, you can be sure that the insurance company lawyers will argue that it was not proper notice.
Ifca 20-day Notification Sheet From the Office of the Insurance Commissioner
Insurance Company Addresses (make sure that you use the right company name for your search, check your policy!)
Note that the 20 Day Notice is effectively a 23 Day Notice because the Insurance Company gets an extra 3 days to respond because the notice was mailed to them.
Step 2 - What Happens Next?
One of the following usually happens:
Step 3 - Seek Legal Help
If the insurance company has paid the additional amount owed, congratulations! You have successfully represented yourself and obtained a great result. On the other hand, if you have not received full payment, your claim has been denied, or you received no response at all, it is definitely time to seek legal help. Contact a litigation attorney who handles insurance bad faith cases, especially IFCA cases. The law has specific requirements that have to be met in order to make a claim for treble damages and attorney fees.