Washington Enacts Law Guaranteeing Independent Auto Damage Appraisals

Washington State is poised to implement a new law enhancing drivers' rights in resolving disputes over auto insurance damage valuations. Senate Bill 5721, passed by both legislative chambers, mandates independent appraisals for first-party auto claims starting January 1, 2026. This allows policyholders and insurers to request a neutral damage assessment when there is disagreement on the repair costs or vehicle value after an accident.

The law formalizes a structured 'second opinion' process, where both the insurer and policyholder bear their own costs for the appraisal, following amendments that removed the initial provision requiring insurers to cover appraisal fees if damage exceeded original estimates by $500 or more. This mechanism aims to provide a more efficient alternative to litigation and reduce prolonged disputes.

The legislation responds to a surge in consumer complaints reported by the Office of the Insurance Commissioner, with 88% involving disagreements over damage valuations. Many motorists have criticized the reliance on automated, AI-driven estimates based on limited photographic evidence, which frequently undervalue actual repair costs by significant margins.

Insurance industry groups like the Northwest Insurance Council and the American Property Casualty Insurance Association have voiced opposition, warning that the bill could increase claim processing times and costs, and potentially lead to frequent use of appraisal procedures.

Pending Governor Bob Ferguson's signature, the new appraisal rights requirement will apply to all new or renewed auto insurance policies in Washington from 2026 onward. The measure represents a notable shift in regulatory compliance aimed at balancing insurer and consumer interests in auto claims processes.