Rule requires insurers to disclose reasons for premium hikes

SEATTLE - A new rule from the Washington Insurance Commissioner will require insurers to explain to policyholders why their premiums have gone up.

The new premium change transparency rule goes into effect Saturday, June 1. And by 2027, insurers must disclose the reasons behind increasing their premiums every time a policy renews, according to the Office of the Washington State Insurance Commissioner.

The new rule covers auto and homeowner insurance policies for people in Washington.

"If your insurance company is going to increase your premium, you have a right to know why," said WA Insurance Commissioner Mike Kreidler. "Hundreds of consumers, every year, have told us they are unable to get a clear answer from their insurance company about why they’re being charged more. This is pretty basic information that should be available, and now it will be."

The rule will go into effect in two phases. The first phase, which starts on Saturday, requires insurers to include a disclaimer on the first page of renewal notices or billing statements that informs the policyholder that they can request details about their premium increase. The insurance company then has 20 days to respond and provide a reasonable explanation for the increase if it's requested.

Phase 2 starts on June 1, 2027, and will require insurance companies to send a notice to policyholders at least 20 days before a renewal with a 10% or more increase.

The explanation must list what primary factors led to the premium increase, whether it be the policyholder’s age, credit history, education, gender, marital status, and occupation.

For auto insurance, other factors include the vehicle’s garaging location, driving record, miles driven, the number of drivers, and the number of vehicles on the policy. For homeowners insurance, those factors can be the property’s age, location, and value.