WA Company Told to Stop Paying Customers Insurance Deductibles

You might not know WA State law prohibits a business or any other entity from helping you pay or waive your insurance deductible for certain types of claims.

   WA Insurance Commissioner sends cease and desist to repair company

WA State Insurance Commissioner's Office (WIC) released information Friday that they've sent a cease and desist to a Bellingham area repair company.

   911-Dry is an emergency water removal and restoration company that responds to emergency situations involving water removal, repairing water damage, mold removal, and more. If your home or business suffers a broken water line, or any other related water issue, they provide services.

However, the WIC says they are violating WA Insurance Law by offering (on their website) up to $2,500 in assistance towards paying a customer's deductible.

The law prohibits any business or entity from offering financial assistance towards paying, or waiving, a consumer's deductible when it comes to property or casualty (liability) insurance claims.

So, apparently, if you have home damage, or you're at fault in a car wreck, or someone is hurt at your business, or other similar events, you are not allowed to get financial assistance towards paying the deductible from the claim.

On the surface, it sounds like a noble gesture.

But according to the WIC, there's a reason for this law:

"Insurance companies pay claims based on the cost of the repair, minus the deductible. If a contractor or repair shop offers to waive or pay a deductible, they may be trafficking in insurance claims. This illegal practice can result in inflated claims — to offset the waived deductible — and can entice consumers to use certain service providers for reasons other than the quality of the services that will be provided."

Insurance policy trafficking involves the sale of an insurance policy to a third party, usually done on a cash basis, and WIC says that's illegal everywhere.

The WIC cease and desist doe NOT mean 911-Dry is engaged in this practice, they were just being told to stop the assistance. 

As of Friday morning, 911-dry still had the $2,500 assistance displayed on their page.