This bill amends the Unfair Claims Settlement Practices Act to define "unfair claims practices" and outline specific acts that constitute unfair claims practices by an insurer. The bill adds several new acts to the list of unfair claims practices, including misleading a claimant about the applicable statute of limitations, refusing to honor a "direction to pay" executed by an insured or claimant, and modifying published manuals or automated appraisal systems without prior agreement. The bill also requires insurers to promptly notify a rental car company in writing of the reason for questioning or challenging the amount charged for a rental car, and it prohibits insurers from discounting documented charges by failing to use an automotive industry standard markup.

Additionally, the bill adds a provision that requires insurers to acknowledge and compensate an auto body repairer for documented procedures identified as necessary by the original equipment manufacturer or paint manufacturer. The bill also includes provisions related to appraisals of damaged motor vehicles, including requirements for licensed appraisers and timeframes for performing initial and supplemental appraisals. If an insurer's appraiser fails to inspect the damaged motor vehicle within the allotted time, the insurer forfeits its right to inspect the vehicle prior to repairs and negotiations are limited to labor and the price of parts.

This bill makes several amendments to current law regarding auto body repair shops and insurance companies. One amendment prohibits insurance companies from refusing to extend rental vehicle coverage requirements to an insured or claimant proportionally to claim delays caused by the insurer. Another amendment prohibits insurance companies from refusing to pay an auto body repair shop for necessary sublet services, including costs and labor incurred to research, coordinate, administrate, or facilitate the necessary sublet service, and an automotive industry standard markup. The bill also amends the conduct of motor vehicle damage appraisers, requiring them to promptly schedule an appointment for appraisal of a damaged vehicle with the auto body repair shop at an agreed-upon date and time. Additionally, the bill establishes a motor vehicle appraisal provision, allowing the insured or claimant to exercise the independent appraisal process if they fail to agree on the amount of a loss with the insurance company.

Statutes affected:
925  SUB A: 27-9.1-4, 27-10.1-6
925: 27-10.1-6