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2 Rhode Island bills aim to hold insurers accountable for used parts requirements, fair claims practices

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Insurance | Legal
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Two Rhode Island bills seek to make it illegal for insurance carriers to withhold adjuster contact information from claimants and create a new set of standards for the utilization of used parts.

HB 5418 would make it an unfair claims practice for claimants, attorneys, or claimant agents to be denied name, phone number, email address, and any other pertinent contact information of not only adjusters but their director supervisors.

It would also be an unfair claims practice if carriers failed to inform claimants or their legal representatives within a week of the assignment of their claim to a different adjuster.

The House Corporations Committee, after a Feb. 28 hearing on the bill, recommended it be held for further study.

“Unfortunately, not all insurance companies always correspond by email. It’s something that all of us are very much used to,” said bill sponsor and committee Chair Rep. Joseph J. Solomon, Jr. “There have also been instances when dealing with an adjuster when an adjuster is no longer located at the insurer and no one notifies the claimant… Under the Unfair Claims Practices Act, the adjusters are required to respond within a certain amount of time but if that adjuster is no longer there, it just goes into the abyss.”

The Rhode Island Department of Business Regulation (RI DBR) told Solomon the amendments presented in his bill are already violations of the state’s unfair claims act so putting out a bulletin from the department would make more sense. The bulletin, which the department said it will draft, would put carriers on notice that they’re required to give out contact information as part of the claims process, a RI DBR representative said during the hearing.

“I just want to give it some teeth so that we won’t have to come back in another year and deal with that legislatively,” Solomon said.

The Auto Body Association of Rhode Island (ABARI) spoke in support of the bill. They’ve experienced issues because it can become very difficult for agents to help their claimants when they can’t get in contact with the carrier. ABARI didn’t return Repairer Driven News’ request for comment on the bills by publication deadline.

HB 5731 would create new standards for used OEM replacement parts, including:

    • Must be of at least equal in kind and quality to the OEM parts in terms of fit, quality, performance, and warranty;
    • Be from a vehicle of the same year or newer; and
    • Have the same or less mileage than the vehicle receiving the used part unless agreed to by the vehicle owner.

Carriers would also be prohibited “to the extent practical” from requiring the use of multiple parts distributors for a single repair if the parts they specify for use are available from a single vendor, and delivery to the shop must be provided by the vendor unless the customer agrees to another arrangement.

Insurers that want used parts to be used would be required to “make allowances for the reasonable cost of any modifications to the parts which may become necessary when making the repair, and for the cost of fitting, removing, returning, and/or handling used parts which do not result in the vehicle being repaired to its condition prior to the loss.”

If used parts picked out by insurers don’t result in the vehicle being repaired to pre-collision condition, carriers would be required within three days from the time the body shop notifies them or the appraiser of the issue to give body shops permission to find the correct used part or get an OEM part. The other option is for the carrier and vehicle owner to reach a different agreement. Body shops would be required to “promptly” notify the appraiser if the used part specified by the carrier isn’t going to work then allow the appraiser to inspect the vehicle again and make any necessary supplements.

“The automobile body shop shall provide documentation of used parts, which do not meet the requirements of this section, as reasonably requested by the insurer,” the bill states. “The insurer shall be permitted to exercise any available rights of recovery against the used parts distributor.”

The bill was referred to the Corporations Committee for a hearing on Feb. 28 but it postponed at the request of the bill sponsor.


Featured image credit: BartCo/iStock

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