Washington’s Senate Bill 6031, championed by Insurance Commissioner Patty Kuderer, has unanimously passed the State Senate. 1 The bill would create a standalone crime of insurance fraud and classify it as a Class B felony, punishable by up to 10 years in prison and significant fines.
On its face, this appears to be a strong, modern step toward combating fraud in the insurance marketplace. The bill provides:
A person is guilty of insurance fraud if the person knowingly, and with intent to defraud, commits, or conceals any material information concerning… Submitting a statement, estimate, invoice, bid, proposal, proof of loss, or any other document that misrepresents the scope of damages or costs of repairs associated with a property insurance claim.
That is not narrow language. It does not limit the crime to fraud against insurers. It does not carve out exceptions for contractors, public adjusters, agents, or insurance company employees. It applies to “a person.”
It further states:
Insurance fraud is a class B felony. Each instance of insurance fraud constitutes a separate offense.
If someone knowingly submits an estimate that misrepresents the scope of damages or the costs of repairs associated with a property claim, and does so with intent to defraud, the statute defines that as a felony.
So, if an insurance company adjuster or a vendor knowingly lowers an estimate without factual support, and does so with intent to misrepresent the true scope or cost of damage in order to reduce payment to a policyholder, does that fall within this definition? Based strictly on the language above, it could.
There is, of course, an important legal distinction between a legitimate dispute over valuation and intentional deception. Adjusters are allowed to disagree. They are allowed to exercise judgment. They are allowed to question scope and have an honest difference of opinion. But they are not allowed to knowingly misrepresent.
Criminal fraud requires proof of intent. It requires showing that the submitted document was materially false, that the person submitting it knew it was false, and that the person intended to deceive. That is a high bar, and it should be.
However, if evidence ever demonstrated that an estimate was deliberately altered to misstate the scope of damage or the cost of repair, not because of a professional disagreement but because of an intent to underpay through deception, or ordered without justification by a superior desk adjuster, the statutory language does not exempt the claims department.
The next question is whether an insurance company itself could face exposure. Under general principles of corporate criminal liability, a company can be held responsible when employees act within the scope of their employment and for the benefit of the company. If fraudulent practices were systemic or directed, liability would not be limited to a single individual. Whether prosecutors would pursue such cases is another matter. But legally, the statute does not appear to create a one-way street.
For policyholders, there is something else significant in this bill. It expands the definition of “victim” to include insurance customers and beneficiaries, making them eligible for criminal restitution. That is an important recognition that fraud in the insurance world does not only move in one direction.
Fraud is fraud. If an estimate or expert report is knowingly manipulated to misrepresent the amount or cause of damage in order to cheat a policyholder, the statute’s plain language suggests that is also fraud.
The real test will be enforcement. Will the law be applied evenly? Will this law, if passed by the Washington House and signed by the Governor, protect policyholders with the same vigor it protects insurers? Will it be used as a shield for integrity rather than a sword wielded selectively?
Insurance is built on trust. When that trust is intentionally broken, the consequences should not depend on who committed the act. Washington has written strong words into this bill. I hope it eventually becomes law.
My bet is that Doug Quinn and the American Policyholders Association (APA) will support this legislation.
Thought For The Day
“Justice cannot be for one side alone, but must be for both.”
—Eleanor Roosevelt
1 Insurance fraud modernization bill passes state Senate. Office of the Ins. Commissioner, Washington State. Feb. 17, 2026.