Conducting a study of insurance coverage options for permanently affordable homeownership units.

Insurance cost study for permanently affordable homes

Beginning July 27, 2025, Washington’s insurance commissioner must study insurance options for new permanently affordable homeownership projects. The goal is to lower condominium construction defect liability insurance costs while preserving access to coverage. The study itself does not lower household costs or change coverage. Qualifying homes must meet the state’s affordable housing definition and have a nonprofit or government sponsor. Their ground lease or deed restriction must preserve affordable resale prices for future low- and moderate-income buyers. It must also give the sponsor first refusal to buy at resale and require sponsor approval for refinancing, including home equity credit lines. Those last two requirements do not apply to limited equity housing cooperatives without a community land trust partner. Sponsors must sign a new agreement lasting at least 99 years at every sale and support and enforce it. The commissioner must consult nonprofit and government sponsors, authorized and unauthorized insurers, builders, and relevant state associations. Identified insurers and risk retention groups must provide requested data. The study must use the commissioner’s insurance market studies from December 31, 2017, onward or other relevant post-2017 information. The commissioner may hire actuarial or other consultants. A report is due to legislative committees by December 31, 2026. It must compare liability risk pools with for-profit condominium models and recommend ways the commissioner and insurers can reduce costs, including existing or new insurance mechanisms. Funding comes from the commissioner’s regulatory account; no amount is specified. The act is null and void if the omnibus budget did not provide specific funding naming the bill or chapter by June 30, 2025. The study section expires December 31, 2027.