The bill amends the "Unfair Claims Settlement Practices Act" by defining various unfair claims practices by insurers, such as misrepresenting policy facts, failing to promptly act on claims, and not attempting to effectuate fair settlements. It introduces a new provision as point (19), which prohibits insurers from refusing to honor a "direction to pay" for property damage benefits up to $5,000 directly to the restoration company of the insured's choice, provided the company is licensed. This insertion allows insurers to question the services billed or the amount charged and does not affect the rights of interested parties unless they have also executed the "direct to pay." Subsequent points in the law are renumbered to accommodate this addition.
The bill also specifies that insurers must honor a "direction to pay" letter when a claim is settled and the insured is represented by a licensed public adjuster, issuing separate checks for the adjuster's fee (up to 10% of the total settlement) and the balance to the insured or other appropriate parties. It outlines the required information for the "direction to pay" letter and maintains the insurer's right to question the billed services or charges. Furthermore, the bill details insurer obligations regarding appraisals, rental coverage, total loss conditions, and payments to auto body shops for sublet services, ensuring these provisions do not conflict with existing direct repair program contracts. The act will take effect on January 1, 2025.
Statutes affected: 2681 SUB A: 27-9.1-4
2681: 27-9.1-4