The bill amends various sections of the General Laws to enhance consumer protections in insurance claims and establish clearer guidelines for insurers. It introduces a new section allowing insured individuals to pursue legal action against insurers for bad faith refusal to pay claims without needing to prove a breach of contract first. The bill also revises the appraisal process for fire insurance loss claims, ensuring that if the insured and the insurer fail to agree on the amount of loss, either party may demand an appraisal, and a denial of coverage does not relieve the insurer of its obligation to resolve disputes through appraisal. The appraisers must be competent and disinterested, and the award must include interest calculated from the date of loss. The insurer is required to issue payment of the appraisal award within thirty days unless the policy does not cover the cause of loss determined by the award.

Additionally, the bill strengthens the "Unfair Claims Settlement Practices Act" by defining new unfair claims practices, including depreciating the cost of labor and failing to account for consequential damage when calculating actual cash value or replacement cost value. It also mandates that insurers notify claimants of their right to invoke the policy's appraisal provision once it becomes clear that there is a disagreement on the claim's amount of loss. The act is designed to take effect upon passage, aiming to improve consumer rights and accountability in the insurance industry.

Statutes affected:
6370: 9-1-33, 27-5-3, 27-9.1-4