The bill amends Section 27-9.1-4 of the General Laws, which pertains to the Unfair Claims Settlement Practices Act, by defining a range of actions that would be considered unfair practices when conducted by insurers. These include misrepresenting policy facts, failing to promptly acknowledge communications, not attempting to settle claims where liability is clear, and forcing insureds to sue for amounts due. The bill introduces a new clause that prohibits insurers from refusing to honor a "direction to pay" for property damage benefits up to $5,000 to a licensed restoration company chosen by the insured or claimant. It also allows insurers to challenge the services billed or the amount charged and maintains the rights of any interested parties unless they have also executed the "direct to pay." Additionally, the bill mandates the use of published manuals for auto body repair appraisals and requires compensation for auto body shops based on current industry-recognized software programs.

Further amendments include a provision that if insurers do not perform an initial or supplemental appraisal within specified timeframes, they forfeit the right to inspect the vehicle before repairs. The bill also stipulates that a vehicle cannot be deemed a total loss if the rebuild or reconstruction costs are less than seventy-five percent of its pre-accident fair market value. Insurers must provide written notice to the owner about the requirements for obtaining a salvage or reconstructed title if they do not retain the salvage. A new insertion details the process for settling claims with a public adjuster, requiring insurers to issue separate checks for the public adjuster's fee (up to ten percent of the total settlement) and the balance to the insured or any loss payee or mortgagee, with specific information included in the "direction to pay" letter. The act is set to take effect on January 1, 2025.

Statutes affected:
7507  SUB A: 27-9.1-4
7507: 27-9.1-4