The bill amends the "Unfair Claims Settlement Practices Act" by defining specific acts that would be considered unfair claims practices by insurers. These acts include misrepresenting policy facts, failing to acknowledge claims communications promptly, not attempting fair settlements, and forcing insured parties to sue for due amounts. A significant insertion is the new provision (19), which prohibits insurers from refusing to honor a "direction to pay" from an insured who wants their property damage benefit paid directly to their chosen licensed restoration company. The bill also prevents insurers from intimidating or coercing consumers to use specific rental car companies and requires insurers to respond to claims within 30 days unless a longer period is agreed upon.

Additionally, the bill modifies the law on handling total loss claims for motor vehicles, stating that a vehicle does not have to be considered a total loss if the rebuild cost is greater than 75% of its fair market value, unless the owner requests it with written authorization. It mandates that adjustments to the retail value of a total loss vehicle must be fair and based on nationally recognized standards. The bill also ensures that insurers cannot refuse to pay for necessary sublet services with a standard markup during auto repairs and that they cannot limit or discount reasonable repair costs based on their own shop rates when the insured chooses a different repair shop. The refusal to honor a "direction to pay" for property damage benefits is also deemed an unfair claims practice. The act will be effective upon passage.

Statutes affected:
5496  SUB A: 27-9.1-4
5496: 27-9.1-4