Washington Insurance Bad Faith Demand Letter

WASHINGTON INSURANCE BAD FAITH DEMAND LETTER

SENT VIA CERTIFIED MAIL, RETURN RECEIPT REQUESTED

AND REGULAR U.S. MAIL

DATE: [__/__/____]

TO:
[________________________________]
[Insurance Company Name]
[________________________________]
[Street Address]
[________________________________]
[City, State, ZIP Code]

ATTENTION: Claims Manager / Bad Faith Claims Unit

CC: Washington State Office of the Insurance Commissioner
P.O. Box 40256
Olympia, WA 98504-0256

FROM:
[________________________________]
[Attorney Name / Law Firm Name]
[________________________________]
[Street Address]
[________________________________]
[City, State, ZIP Code]
[________________________________]
[Telephone Number]
[________________________________]
[Email Address]

RE: FORMAL BAD FAITH DEMAND AND 20-DAY IFCA NOTICE

Insured: [________________________________]

Claimant: [________________________________]

Claim Number: [________________________________]

Policy Number: [________________________________]

Date of Loss: [__/__/____]

Type of Loss: [________________________________]

Policy Type: ☐ Homeowners ☐ Auto ☐ Commercial Property ☐ UM/UIM ☐ Other: [________________]

I. INTRODUCTION AND 20-DAY NOTICE REQUIREMENT

This letter constitutes a formal demand for payment of all benefits owed under the above-referenced insurance policy and serves as the MANDATORY 20-DAY NOTICE required under RCW § 48.30.015(8) of Washington's Insurance Fair Conduct Act (IFCA) prior to filing suit.

NOTICE TO INSURER: Pursuant to RCW § 48.30.015(8), this letter provides written notice of the basis for a cause of action under IFCA. You have TWENTY (20) DAYS from receipt of this notice to cure the violations described herein.

CC TO INSURANCE COMMISSIONER: As required by RCW § 48.30.015(8), a copy of this notice is being simultaneously provided to the Washington State Office of the Insurance Commissioner.

II. WASHINGTON LEGAL FRAMEWORK

A. Insurance Fair Conduct Act (IFCA) - RCW § 48.30.015

Washington's IFCA provides a powerful private right of action for insureds whose claims are unreasonably denied. The statute provides:

Remedies Under IFCA:

• Actual Damages
• TREBLE DAMAGES (up to three times actual damages)
• Reasonable Attorney's Fees
• Actual and Statutory Litigation Costs, Including Expert Witness Fees

B. Elements of an IFCA Claim

To establish a claim under IFCA, the insured must show:

1. An unreasonable denial of coverage or payment of benefits; OR
2. A violation of the regulations enumerated in RCW § 48.30.015(5) (WAC 284-30-330)

C. Key Case Law - Perez-Crisantos v. State Farm

In Perez-Crisantos v. State Farm Fire & Casualty Co., 187 Wash.2d 669 (2017), the Washington Supreme Court held that an unreasonable denial of coverage must occur for an insured to pursue a cause of action under IFCA. A mere regulatory violation alone, without an unreasonable denial, is insufficient.

However, many regulatory violations under WAC 284-30-330 will themselves constitute unreasonable denial of coverage.

D. Consumer Protection Act (RCW Chapter 19.86)

IFCA violations may also support claims under Washington's Consumer Protection Act, which has a four-year statute of limitations.

E. Common Law Bad Faith

Washington also recognizes common law bad faith claims. Bad faith is established where the insurer acts unreasonably and with knowledge that there is no reasonable basis for its conduct. Bad faith is defined as "an actual or implied awareness of the absence of a reasonable basis for denying benefits of the policy."

III. FACTUAL BACKGROUND

A. The Insured and Policy Information

Named Insured(s): [________________________________]

Policy Number: [________________________________]

Policy Period: [__/__/____] to [__/__/____]

Policy Type: [________________________________]

Coverage Limits:

• Coverage A (Dwelling/Property): $[________________________________]
• Coverage B (Other Structures): $[________________________________]
• Coverage C (Personal Property): $[________________________________]
• Coverage D (Loss of Use): $[________________________________]
• Liability Coverage: $[________________________________]
• Medical Payments: $[________________________________]
• Uninsured/Underinsured Motorist: $[________________________________]
• Other Applicable Coverage: $[________________________________]

Deductible: $[________________________________]

Premium Paid: $[________________________________]

B. The Loss Event

Date of Loss: [__/__/____]

Time of Loss: [________________________________]

Location of Loss: [________________________________]

Description of Loss Event:

[________________________________]
[________________________________]
[________________________________]
[________________________________]
[________________________________]
[________________________________]

C. Claim Submission and Response

Date Claim Reported: [__/__/____]

Method of Reporting: ☐ Telephone ☐ Online ☐ Written ☐ Agent

Claim Number Assigned: [________________________________]

Initial Adjuster Assigned: [________________________________]

Date Adjuster Contacted Insured: [__/__/____]

Date of Initial Inspection: [__/__/____]

D. Documentation Submitted

The following documentation was timely provided to support this claim:

☐ Completed proof of loss form, dated [__/__/____]
☐ Police report / Fire report / Incident report, dated [__/__/____]
☐ Photographs and/or video documentation
☐ Repair estimates from licensed contractors
☐ Medical records and bills
☐ Receipts and invoices for damaged property
☐ Inventory of damaged/destroyed items
☐ Examination under oath transcript, dated [__/__/____]
☐ Expert reports (specify): [________________________________]
☐ Other documents: [________________________________]

E. Timeline of Claim Handling

IV. COVERAGE ANALYSIS

A. Applicable Policy Provisions

The policy at issue provides coverage for the type of loss that occurred. Specifically:

Insuring Agreement: [________________________________]
[________________________________]
[________________________________]

Relevant Coverage Provisions:
[________________________________]
[________________________________]
[________________________________]

B. Coverage Clearly Applies

Based on the policy language and the facts of this loss:

1. The loss occurred during the policy period
2. The loss was caused by a covered peril
3. The property/person is a covered interest under the policy
4. The insured complied with all policy conditions
5. No exclusions apply to bar coverage
6. The damages claimed are within policy limits

C. Exclusions Do Not Apply

Your company has cited the following exclusion(s) as a basis for denial:

Cited Exclusion: [________________________________]

Why This Exclusion Does Not Apply:
[________________________________]
[________________________________]
[________________________________]

V. UNREASONABLE DENIAL AND BAD FAITH CONDUCT

A. Unreasonable Denial of Coverage (IFCA)

Your company's denial of coverage was unreasonable because:

[________________________________]
[________________________________]
[________________________________]
[________________________________]

B. Violations of WAC 284-30-330 (Enumerated in RCW § 48.30.015(5))

Your company has violated the following regulations:

☐ WAC 284-30-330(1) - Misrepresentation
Misrepresenting pertinent facts or policy provisions relating to coverage at issue:
[________________________________]

☐ WAC 284-30-330(2) - Failure to Acknowledge Communications
Failing to acknowledge and act reasonably promptly upon communications:
[________________________________]

☐ WAC 284-30-330(3) - Failure to Adopt Investigation Standards
Failing to adopt and implement reasonable standards for prompt investigation:
[________________________________]

☐ WAC 284-30-330(4) - Refusal to Pay Without Investigation
Refusing to pay claims without conducting a reasonable investigation:
[________________________________]

☐ WAC 284-30-330(5) - Failure to Affirm or Deny Coverage
Failing to affirm or deny coverage within a reasonable time after proof of loss:
[________________________________]

☐ WAC 284-30-330(6) - Failure to Attempt Good Faith Settlement
Not attempting in good faith to effectuate prompt, fair settlements when liability is reasonably clear:
[________________________________]

☐ WAC 284-30-330(7) - Compelling Litigation
Compelling insured to institute litigation by offering substantially less than amounts ultimately recovered:
[________________________________]

☐ WAC 284-30-330(8) - Attempting to Settle for Less Than Reasonable Value
Attempting to settle claims for less than a reasonable person would believe entitled:
[________________________________]

☐ WAC 284-30-330(9) - Attempting to Settle on Lesser-Known Coverage
Attempting to settle claims on a lesser-known coverage basis:
[________________________________]

☐ WAC 284-30-330(10) - Unreasonable Delay
Failing to promptly provide a reasonable explanation for denial of a claim:
[________________________________]

☐ WAC 284-30-330(13) - Failing to Provide Forms
Failing to promptly provide necessary forms:
[________________________________]

☐ WAC 284-30-330(14) - Not Informing Claimant of Coverage
Failing to advise claimant of all coverage potentially available:
[________________________________]

☐ Other WAC Violations:
[________________________________]

C. Common Law Bad Faith

Your company's conduct also constitutes common law bad faith because it acted unreasonably and with knowledge that there was no reasonable basis for its conduct:

[________________________________]
[________________________________]
[________________________________]

VI. DAMAGES

A. Contract Damages - Policy Benefits Owed

Coverage A - Property Damage:

• Replacement Cost / Actual Cash Value: $[________________________________]
• Less Depreciation (if ACV): $[________________________________]
• Less Deductible: $[________________________________]
• Net Amount Due: $[________________________________]

Coverage D - Loss of Use:

• Amount Incurred: $[________________________________]
• Amount Due: $[________________________________]

Medical Expenses:

• Past Medical Expenses: $[________________________________]
• Future Medical Expenses: $[________________________________]
• Total Medical: $[________________________________]

Lost Wages / Income:

• Past Lost Wages: $[________________________________]
• Future Lost Wages: $[________________________________]
• Total Lost Wages: $[________________________________]

Other Contract Damages:

TOTAL ACTUAL DAMAGES: $[________________________________]

B. Treble Damages Under IFCA

Pursuant to RCW § 48.30.015(2), upon a finding that the insurer acted unreasonably, the court may increase the total award of damages to an amount not to exceed THREE TIMES the actual damages.

Actual Damages: $[________________________________]

Potential Treble Damages (3x): $[________________________________]

C. Attorney's Fees and Costs

Under RCW § 48.30.015(3), the court shall award reasonable attorney's fees and actual and statutory litigation costs, including expert witness fees.

Attorney's Fees Incurred to Date: $[________________________________]

Estimated Additional Fees if Litigation Required: $[________________________________]

Expert Witness Fees: $[________________________________]

Litigation Costs: $[________________________________]

D. Summary of Damages

VII. SETTLEMENT DEMAND AND 20-DAY CURE PERIOD

A. Time-Limited Demand

This constitutes a TIME-LIMITED SETTLEMENT DEMAND and the 20-DAY CURE PERIOD NOTICE required under RCW § 48.30.015(8).

DEMAND AMOUNT: $[________________________________]

This demand includes:

• Policy benefits owed: $[________________________________]
• Consequential damages: $[________________________________]
• TOTAL DEMAND: $[________________________________]

B. 20-Day Cure Period

DATE OF THIS NOTICE: [__/__/____]

20-DAY DEADLINE: [__/__/____]

Pursuant to RCW § 48.30.015(8), you have TWENTY (20) DAYS from the date you receive this notice to cure the violations identified herein.

To cure the violations, you must:

1. Pay the full policy benefits owed; AND
2. Correct the claims handling violations

C. Terms of Settlement

If payment is made within 20 days, our client agrees to:

☐ Execute a full release of all claims arising from this loss
☐ Not pursue treble damages
☐ Not pursue attorney's fees beyond reasonable amounts incurred
☐ Maintain confidentiality regarding settlement terms
☐ Other terms: [________________________________]

D. Reservation of Rights

If the violations are not cured within 20 days:

1. Suit will be filed without further notice
2. TREBLE DAMAGES will be sought
3. FULL ATTORNEY'S FEES AND COSTS will be sought
4. This letter may be used as evidence of your company's knowledge of violations
5. A copy of this letter will be provided to the court

VIII. CONSEQUENCES OF NON-COMPLIANCE

A. Litigation

If your company fails to cure within 20 days, our client will file suit in the appropriate Washington court, asserting claims for:

1. Breach of insurance contract
2. Violation of IFCA (RCW § 48.30.015)
3. Treble damages
4. Attorney's fees and costs
5. Violation of Consumer Protection Act (RCW Chapter 19.86)
6. Common law bad faith

B. Regulatory Complaints

A copy of this notice has been sent to the Washington State Office of the Insurance Commissioner. Additional complaints will be filed as appropriate.

C. Discovery

In litigation, we will pursue extensive discovery, including:

• Complete claims file and all related documents
• Internal communications regarding this claim
• Training materials and claims handling guidelines
• Similar claims handled by your company
• Depositions of all persons involved in handling this claim

IX. PRESERVATION OF EVIDENCE

LITIGATION HOLD NOTICE

This letter constitutes formal notice to preserve all documents and electronically stored information related to this claim, including but not limited to:

☐ Complete claims file
☐ All correspondence (internal and external)
☐ All emails, text messages, and other electronic communications
☐ Photographs, videos, and inspection reports
☐ Adjuster notes and diaries
☐ Expert reports and opinions
☐ Training materials and claims manuals
☐ Similar claims files for pattern evidence
☐ Financial records
☐ Personnel files of persons involved in claim handling
☐ All metadata associated with electronic documents

Failure to preserve this evidence may result in sanctions and adverse inference instructions at trial.

X. RESPONSE REQUIRED

Please direct your response to:

[________________________________]
[Attorney Name]
[________________________________]
[Law Firm Name]
[________________________________]
[Street Address]
[________________________________]
[City, State, ZIP Code]
[________________________________]
[Telephone]
[________________________________]
[Email]

We require a substantive response within 20 days as required by RCW § 48.30.015(8).

XI. CONCLUSION

Your company's handling of this claim constitutes an unreasonable denial of coverage in violation of Washington's Insurance Fair Conduct Act. The evidence clearly establishes coverage, and your company has no legitimate basis for its position. Under IFCA, your company faces significant exposure for treble damages and attorney's fees.

We urge you to cure the violations within the 20-day period to avoid litigation.

This letter is written without prejudice to any rights, remedies, or defenses our client may have, all of which are expressly reserved.

We look forward to your prompt response.

Respectfully submitted,

________________________________________
[Attorney Name]
[Bar Number]
[Law Firm Name]

Date: [__/__/____]

VERIFICATION

STATE OF WASHINGTON
COUNTY OF [________________________________]

I, [________________________________], being duly sworn, state that I am the [________________________________] in the above-referenced matter, that I have read the foregoing Bad Faith Demand Letter, and that the facts stated therein are true and correct to the best of my knowledge, information, and belief.

________________________________________
[Signature]

Subscribed and sworn to before me this [____] day of [________________], 20[____].

________________________________________
Notary Public
My Commission Expires: [__/__/____]

EXHIBITS AND ATTACHMENTS

☐ Exhibit A: Copy of Insurance Policy
☐ Exhibit B: Proof of Loss / Claim Documents
☐ Exhibit C: Correspondence with Insurer
☐ Exhibit D: Denial Letter(s)
☐ Exhibit E: Supporting Documentation
☐ Exhibit F: Expert Reports
☐ Exhibit G: Damage Calculations
☐ Exhibit H: Medical Records (if applicable)
☐ Exhibit I: Photographs/Video Evidence
☐ Exhibit J: Other: [________________________________]

CERTIFICATE OF SERVICE

I hereby certify that on [__/__/____], a true and correct copy of this Bad Faith Demand Letter and 20-Day IFCA Notice was served upon:

Insurance Company:
[________________________________]
By: ☐ Certified Mail, Return Receipt Requested ☐ Regular U.S. Mail ☐ Overnight Delivery

Washington State Office of the Insurance Commissioner:
P.O. Box 40256, Olympia, WA 98504-0256
By: ☐ Certified Mail, Return Receipt Requested ☐ Regular U.S. Mail

________________________________________
[Attorney Signature]