The bill introduces amendments to the "Unfair Claims Settlement Practices Act," specifically targeting the conduct of insurers in handling claims. It outlines various unfair practices, such as misrepresenting policy details, failing to acknowledge claims promptly, not attempting fair settlements, and forcing insured parties to sue for rightful amounts. The bill also addresses unfair practices in auto insurance claims, including prohibiting insurers from coercing consumers to use specific rental car companies, refusing to honor "direction to pay" for rental benefits, modifying appraisal manuals without consent, and not compensating auto body shops for documented charges. It mandates compliance with regulations, requires licensed appraisals for damages over $2,500, and sets time frames for appraisals.

The bill adds two new provisions to the Act. The first insertion requires insurers to honor a "direction to pay" letter when a claim is settled and a licensed public adjuster represents the insured, issuing separate checks for the adjuster's fee (up to 10% of the settlement) and the balance to the insured or other appropriate parties. The second insertion prohibits insurers from paying the insured, mortgagee, or loss payee without deducting the public adjuster's fee if a conforming "direction to pay" letter is received, ensuring the adjuster's fee is paid directly to them. These provisions do not affect contracts between auto body repair facilities and insurers under direct repair programs. The bill aims to ensure public adjusters are compensated according to the insured's directions and takes effect upon passage.

Statutes affected:
2682: 27-9.1-4