No law in Washington requires the purchase of home owners insurance when buying a home. If, on the other hand, buyers need a mortgage to pay for the house, the lender will probably insist that they have basic home insurance before closing on the loan.
Lenders for mortgages can acquire forced-placed insurance on your property. This type of insurance is to protect the lender, not the seller, against possible losses.
Purchasing a home is a major milestone for many Washington residents. Along with the excitement of homeownership comes the responsibility of protecting your investment. This is where homeowners insurance enters the picture.
While Washington state doesn’t require homeowners insurance by law, your mortgage lender will likely mandate coverage to secure their interest in your property. Even if you own your home outright, a policy is highly recommended to safeguard your most valuable asset against financial loss
In this article, we’ll explore key facts about homeowners insurance laws and regulations in Washington. I’ll cover what coverages lenders require, what’s optional, and tips for getting the best policy. Read on to learn what Washington homeowners need to know about insuring their slice of the American dream.
Mortgage Lenders Require Basic Homeowners Insurance
If you have a mortgage or home equity line of credit, your lender will stipulate that you buy a homeowners insurance policy. They want the reassurance that your property can be repaired or rebuilt if damaged or destroyed
Specifically, lenders require what’s known as “hazard insurance” at a minimum. This covers your dwelling and structures against losses from perils like fire, lightning, windstorms, hail, explosions, riots, aircraft, vehicles, smoke, vandalism, and theft.
In most cases, hazard policies also include “extended coverage” for damage from falling objects, weight of ice and snow, and water-related disasters such as leaks from plumbing, heating, air conditioning systems, or household appliances.
The amount of dwelling coverage you purchase should equal the replacement cost of your home. This is what it would cost to rebuild at today’s construction prices, not the current market or appraised value. Replacement cost is the best way to avoid being underinsured.
Flood Insurance is Required in High-Risk Areas
If your home lies in a FEMA-designated high-risk flood zone, your mortgage lender will also require you to buy flood insurance through the National Flood Insurance Program (NFIP).
Flood coverage is excluded under standard homeowners policies but can be purchased as a separate policy. Lenders mandate this because flooding is the most common and costly natural disaster in the U.S.
Even a few inches of water can cause tens of thousands of dollars in damage. Make sure you know your flood risk and get flood insurance if required by your lender.
What Optional Coverages Should You Consider?
Beyond the basic dwelling hazard coverage required by lenders, most homeowners opt for additional protection. Top options to consider include:
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Personal Property: Covers your possessions against covered losses both on and off the premises. Make sure limits are high enough to replace all belongings.
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Loss of Use: Pays additional living expenses if you can’t inhabit your home after a covered loss. Covers costs for temporary housing, restaurant meals, pet boarding, etc.
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Personal Liability: Protects against legal claims if someone is injured or their property is damaged on your property. $100,000 is typically the minimum recommended.
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Water Backup: Covers damage from water backing up through sewers, drains or sumps, which is excluded under standard policies. Highly recommended.
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Earthquake: Shakes and quakes aren’t covered under hazard policies. This add-on protection is wise to consider in earthquake-prone Washington.
Take time to discuss add-on coverages with your insurance agent. An ounce of prevention is truly worth a pound of cure when it comes to securing your home and assets.
Key Factors That Affect Your Premiums in Washington
The exact cost of your homeowners insurance policy will vary based on these key factors:
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Location: Homes in higher-risk areas for natural disasters and crime pay higher premiums.
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Age of Home: Newer homes qualify for lower premiums in most cases.
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Construction Type: Wood frame homes are more economical to insure than masonry and stucco dwellings.
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Claims History: Frequent past claims will increase your rates.
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Credit Score: Washington allows insurers to use credit-based insurance scores to set rates. Maintaining good credit means lower premiums.
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Deductible Amount: Choosing a higher deductible reduces monthly premiums but increases out-of-pocket costs when you file a claim.
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Discounts: Taking defensive measures like installing alarms and fire extinguishers, and bundling policies together can lower costs.
Shop around and compare quotes to find the best value. Just make sure to choose a reputable insurer that will deliver solid financial protection when you need it most.
Key Washington Laws Protect Homeowners’ Rights
Beyond lender requirements, Washington has laws in place to defend homeowners’ rights and hold insurers accountable. Key protections include:
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Premium Increase Notice: Insurers must provide 30 days written notice before increasing premiums 10% or more at renewal per RCW 48.18.292.
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Grace Period for Payments: Homeowners have a minimum 10 days grace period after a premium is due before coverage can be cancelled per RCW 48.18.290.
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Nonrenewal Restrictions: Insurers may only non-renew policies under specific circumstances per RCW 48.18.291. Reasons must be provided.
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Claim Denial Appeals: Denied claims can be appealed to the Washington Office of the Insurance Commissioner for investigation per RCW 48.30.015.
Stay up-to-date on your rights and don’t hesitate to file an official complaint if you feel mistreated. Washington regulators aim to ensure fair treatment for homeowners.
Finding the Best Insurer for Your Needs
With key mortgage requirements, optional add-ons, and your budget in mind, take time to identify the ideal home insurer for your situation.
Be sure to check companies’ financial strength ratings and shop around for the optimal blend of value, features, and service. Local independent insurance agents are a great resource to discuss needs and get quotes.
Homeownership brings many joys as well as responsibilities. Protect your precious property and financial interests by securing a tailored homeowners insurance policy that complies with Washington laws and regulations.
Your homeowner rights & responsibilities
If you need to file a home insurance claim, you should know what your rights and duties are as a homeowner.
Homeowners must:
- Cooperate with the investigation
- Provide proof of purchase and receipts for items
- There’s no need to show proof of purchase if you can show pictures of the broken or missing items.
- Submit claims and information within reasonable periods of time
As a homeowner, you have the right to:
- A clear explanation of what is covered by your policy
- A detailed list of the parts of your claim that will be covered
- Responses from the insurer in a timely manner
- Quick payouts and decisions on claims from the insurance company
- A way to appeal if you don’t agree with the decision or the amount given
- They can work with you to send your claim to a public adjuster for review if you think your claim was denied unfairly. Remember that the public adjuster you hire must have a license in the state of Washington.
Cheap Homeowners Insurance In Washington – Best Rates And Coverage
FAQ
Is home insurance mandatory in Washington state?
How long does an insurance company have to settle a homeowners claim in Washington state?
What is the minimum property damage insurance in Washington state?
What is the average cost of homeowners insurance in Washington state?
What are Washington state’s insurance laws & rules?
The laws and rules that define Washington state’s insurance requirements for insurers, producers and regulated entities are laid out in Title 284 WAC (Washington Administrative Code) and Title 48 RCW (Revised Code of Washington). Below are lists we’ve put together of frequently used insurance laws and rules organized by topic.
Does Washington require homeowners insurance?
No, homeowners insurance is not required by law in Washington. However, in order to get a home loan, your mortgage lender will likely require you to obtain a certain amount of insurance coverage. What does homeowners insurance cover in Washington?
What does home insurance cover in Washington State?
Every policy is different, but home insurance policies in Washington typically come with several standard coverages. Dwelling (Coverage A). This coverage helps you pay for damage to your home from a covered event, such as fire, wind, lightning or hail. Other structures (Coverage B).
How much does home insurance cost in Washington State?
The average premium for home insurance coverage in Washington is $937 per year 1, according to a 2020 report (the most recent data available) by the National Association of Insurance Commissioners (NAIC). However, insurance costs in most states have changed since then.