The bill amends Sections 27-5-3 and 27-5-9.1 of the General Laws in Chapter 27-5, which governs fire insurance policies and reserves in Rhode Island. It introduces a new standard fire insurance policy format that codifies uniform appraisal procedures and payment obligations, reflecting contemporary claim-handling practices while preserving long-standing consumer protections.

The bill modifies the notification requirement for insured parties after a loss from "give immediate written notice" to "notify this company as soon as practicable," and emphasizes the necessity for reasonable efforts to protect the property from further damage. It updates the appraisal process for loss disputes, allowing either party to demand an appraisal in writing, regardless of whether coverage is accepted, and sets qualifications for appraisers and umpires to ensure they are knowledgeable in relevant valuation methods and are residents of Rhode Island.

Additionally, the bill establishes clearer procedures for appraisals and payment obligations, ensuring alignment with modern claim-handling practices. It mandates that restoration efforts utilize new materials that match the existing ones in quality and appearance when not fully replacing property. The bill specifies that replacement cost value calculations must adhere to strict building and safety standards, excluding depreciation for certain costs, while actual cash value calculations should only consider reasonable depreciation for replaced materials.

Furthermore, the bill introduces a simplified comprehensive insurance policy option for broader risk coverage, subject to regulatory approval, and establishes a ten-year limitation period for non-fire and non-lightning homeowners claims, overriding any shorter contractual provisions. Claims related to fire or lightning will continue to follow existing laws. This legislation aims to enhance clarity and fairness in the insurance claims process.

Statutes affected:
2261: 27-5-9.1