Wash. Gov. Signs Credit-Based Scoring Bill and Construction Defect Legislation

April 8, 2002

Gov. Gary Locke has signed House Bill 2544 restricting insurers’ use of credit-based insurance scores. Earlier in the week, he signed Senate Bill 6409, providing an opportunity for corrective action to be taken before a construction defect lawsuit can be filed.

While Locke’s approval of HB 2544 was anticipated, National Association of Independent insurers (NAII) Northwest Regional Manager Michael Harrold continued to insist the action was bad public policy.

“Because of this law, the majority of policyholders in Washington will be deprived of discounts they deserve because their favorable insurance scores show clearly that they are less likely to file insurance claims in the future,” Harrold said.

Underwriting provisions in HB 2544 will take effect on Jan. 1, 2003, and rating provisions will become effective June 30, 2003.

NAII testified in support of SB 6409 during the legislative process, and Harrold sent a letter to Locke urging him to sign the bill.

Under SB 6409, which will take effect June 13, 2002, anyone intending to file a construction defect lawsuit must provide written notice to the builder 45 days before doing so. The builder then must respond within 21 days and may offer to remedy the defect, compromise by lowering the payment or dispute the claim. Newly discovered defects may be added to an existing lawsuit if the builder is likewise given notice and 21 days to respond.

“SB 6409 is good for consumers and builders because it helps provide an opportunity for disputes to be resolved in a reasonable manner and should allow consumers to get what they paid for without having to become involved in a full blown and expensive legal proceeding,” Harrold said.

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