Advocates, on the other hand, say passing R-67 will protect consumers and businesses from unreasonable delays and denials of insurance claims.

Washington voters are being asked to make the call. The measure was first initiated as a bill passed by state legislators earlier this year. If approved, R-67 would allow policyholders to sue for triple the damages if a court finds their insurance company failed to pay a legitimate claim. The measure would also allow courts to order insurers to cover the legal fees of claimants who've been wrongfully denied. If rejected, the legislation for R-67 dies along with it.

"The triple damages are what's most upsetting," said Bruce Davidson, owner of Vancouver-based Davidson & Associates Insurance.

He agreed with an insurance industry analysis that higher premiums would be a certain consequence of R-67, as insurance companies would factor the cost of possible litigation and settlement into their rates. The study, conducted for state insurers by consultant firm Milliman Inc. of Milwaukee, Wis., shows that consumers can expect rates to increase $205 a year per household if the measure is approved - a $650 million rate increase statewide for auto, home and business policyholders.

"Insurance is math," Davidson said. "It's based on what you did in the past to prepare for the future."

Supporters of the measure disagree, saying its passage would only stop insurance companies from low-balling and denying claims, a growing practice that creates a windfall for the insurance industry, said Sue Evans, a spokeswoman for the Approve 67 campaign.

"When the insurance company delays or denies a claim long enough (the insured) either gives up or goes away, and the insurance industry counts on that." Evans said.

Evans said the practice has no consequences under existing state law, which only requires the insurance company to pay the benefit amount denied in the first place if a court finds the claim was unreasonably withheld.

"That's why insurance companies have adopted a new business creed. It is delay, deny and defend," Evans said.

Another view

That's not how the insurance industry works, said Gary Strannigan, governmental affairs director of Seattle-based Safeco Corp.

Strannigan attributed more than 20 percent of denied claims to insurance fraud, primarily auto-theft fraud, a problem insurance companies would find difficult to combat under R-67.

"The Approve 67 offers a compelling argument, but it doesn't reflect how the industry actually works," he said.

As one of Washington's largest insurance companies, Safeco has contributed about $1.2 million to the industry's $9 million anti-R-67 campaign.

If successful, "We figure it will avoid costs of up to $52 million for our policyholders," Strannigan said.

Evans disagreed, saying insurance companies would have no reason to raise rates under R-67.

"Every reputable consumer group in the nation has found no evidence that consumer protection laws increase insurance rates," Evans said.

The $3 million Approve 67 campaign has been financed largely by trial lawyers, Evans said.

Her group estimates between 2,800 and 4,000 complaints of unreasonably denied claims are filed in the state court system each year, a number Evans said is hard to track as court records don't distinguish other insurance suits from first-party claims.

Cami Joner covers the insurance industry. She can be reached at 360-759-8018 or cami.joner@columbian.com