The bill amends Section 27-9.1-4 of the General Laws under the "Unfair Claims Settlement Practices Act" by introducing a definition of "unfair claims practices" and outlining specific actions that insurers must avoid, such as misrepresenting facts, failing to promptly acknowledge claims, and refusing to honor "directions to pay" from insured individuals. The new provisions will take effect on January 1, 2025, and aim to enhance consumer protection by ensuring that insurers act in good faith and adhere to reasonable standards in their claims handling processes.

Additionally, the bill raises the threshold for requiring an appraisal of motor vehicle damage from $2,500 to $5,000 and mandates that a licensed appraiser, unaffiliated with the repair facility, conduct a physical inspection of the vehicle. Insurers are required to complete an initial appraisal within four business days of a request from an auto body repair shop, with similar timelines for supplemental appraisals. If these deadlines are not met, insurers forfeit their right to inspect the vehicle before repairs. The bill also clarifies the definition of "fair market value" for total loss designations, ensures vehicle owners are notified about salvage title requirements, and prohibits insurers from limiting repair costs based on their preferred shops if the insured opts for a different facility.

Statutes affected:
5571: 27-9.1-4