The national guides cover the specialty coverages in this area: inland marine, crime, surety, professional liability, umbrellas and flood. This guide covers two Washington markets for risks the regular market won't take: the FAIR plan for essential property insurance, and surplus lines. It also covers a Washington rule on bid bonds.

The FAIR plan (chapter 284-19 WAC)

Washington's FAIR plan makes essential property insurance available when it can't be bought in the normal market (WAC 284-19-020).

• What it covers: standard fire and extended coverage, vandalism and builder's risk. It doesn't cover auto, farm or manufacturing risks (WAC 284-19-050).
• Limit: up to $1,500,000 per location. The facility tries to place any excess (WAC 284-19-070(2)).
• Access:
  • An applicant doesn't have to prove they were turned down in the normal market. The facility may ask about the producer's efforts.
  • Anyone with an insurable interest gets a free inspection, with no deposit premium required first (WAC 284-19-060).
• Decisions: within three business days of the inspection, the facility says the risk is acceptable, acceptable with improvements, or not acceptable (WAC 284-19-080(1)).
• Standards may look at the property's physical condition, use and housekeeping, but not the neighborhood or location (WAC 284-19-080(3)).
• Policies are issued on standard forms for one year, at inspection-bureau rates with no deviations (WAC 284-19-100).
• Cancellation or nonrenewal is allowed only for listed reasons or with the governing committee's approval. The notice states the reason and the right to appeal (WAC 284-19-110).
• Appeals are decided in writing within 15 business days, and committee decisions may be appealed to the Commissioner.
• Producers: the commission is 10% of premium (WAC 284-19-130). All licensed producers must cooperate with the plan (WAC 284-19-165).

Surplus lines (chapter 48.15 RCW)

• Surplus lines coverage must go through a licensed surplus line broker (RCW 48.15.040).
• Coverage may be placed only if it can't be obtained after diligent effort from a majority of the authorized insurers writing that kind of insurance.
• It may never be placed just to get a lower rate or other competitive advantage.
• The broker files a certification within 60 days after placing the coverage (RCW 48.15.040(5)(d)).
• Cancellation of a surplus lines policy needs at least 10 days' notice for nonpayment and 20 days for other reasons (WAC 284-30-590(5)).
• Surplus lines insureds have no guaranty association protection.
• A contract with an unauthorized insurer can be voided by the insured but not by the insurer (RCW 48.15.030).
• Anyone other than a licensed surplus line broker who places coverage with an unauthorized insurer is personally liable for it (RCW 48.15.020).
• A producer must make a good-faith effort to confirm the insurer is authorized or the placement is through a licensed broker (RCW 48.17.067).

Bid bonds and contract insurance (RCW 48.30.270)

A public agency or other party may not require a bidder to get its surety bonds or insurance from a particular insurer, broker or producer. It may still approve the form and sufficiency of the bond.

Common exam traps

• The FAIR plan limit is $1,500,000 per location. It doesn't write auto or farm risks.
• An applicant doesn't have to show a turn-down to get FAIR plan coverage, and the inspection is free.
• Location or neighborhood can't be an underwriting standard.
• The FAIR plan producer commission is 10%.
• Surplus lines needs declinations from a majority of authorized insurers, and lower price is never a valid reason.
• Surplus lines cancellation notice is 10/20 days.