Rhode Island Gov. Daniel McKee has signed legislation amending the state’s Unfair Claims Practices Act to change the definition of unfair claims settlement practices by insurers and motor vehicle damage appraisers.

Senate Bill 0925, which was signed last week, also creates a new chapter in the act allowing damaged vehicles to be appraised by a third party when the insurer and driver can’t agree on the amount of a loss. It took effect immediately.

Amendments to the Unfair Claims Practices Act require insurers to “acknowledge and compensate an auto body repairer for documented procedures identified as necessary by the original equipment manufacturer, paint manufacturer, when included in the repairer’s appraisal, or when requested by the repairer.”

The act was also amended to require insurers to promptly schedule an appointment for an appraisal of a damaged vehicle with a shop at an agreed date and time within normal hours.

“If the insurer’s appraiser fails to inspect the damaged motor vehicle within the allotted number of business days for an initial appraisal or a supplemental appraisal, the insurer shall forfeit its right to inspect the damaged vehicle prior to repairs, and negotiations shall be limited to labor and the price of parts and shall not, unless objective evidence to the contrary is provided by the insurer, involve disputes as to the existence of damage or the chosen manner of repair,” the legislation says.

Existing language in the act requires an initial appraisal to be completed within three business days after a request from a body shop is received.

The legislation also includes a vehicle appraisal amendment. It specifies that when an insurer and the insured cannot agree on the amount of a total loss, either can pursue an independent appraisal process, with the final estimate considered binding.

The process requires both the insurer and vehicle owner to select an appraiser within three business days after the written demand is received.

“If the insurer’s appraiser fails to inspect the damaged motor vehicle within the three business days the insurer shall forfeit its right to inspect the damaged vehicle prior to repairs, and negotiations shall be limited to labor and the price of parts and shall not, unless objective evidence to the contrary is provided by the insurer, involve disputes as to the existence of damage or the chosen manner of repair,” the legislation says.

The timeframes can be extended by mutual agreement under the legislation, and if an agreement can’t be reached among the appraisers within three days, the party who requested the independent appraisal process can select an umpire to make a final decision.

Separately, two Rhode Island bills that 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 were introduced during the past legislative session.

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 was passed by the House last month and referred to the Senate Judiciary committee for a final vote.

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.

That bill was tabled in March for further study.

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