Rhode Island Implements New Law for Auto Insurance Appraisals

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Interior of a professional auto repair shop with vehicles being serviced.

News Summary

Rhode Island has enacted a new law, HB 6054, to enhance fairness in auto insurance appraisal disputes. Signed by Governor McKee, the law requires insurers and claimants to select independent appraisers and sets strict timelines for appraisals, addressing potential conflicts of interest and rising auto insurance costs in the state. It mandates including a right to appraisal in all auto insurance policies, providing better consumer protection amidst high collision repair expenses and a growing trend of uninsured drivers.

Rhode Island has officially implemented a new law aimed at improving the process for handling appraisal disputes between auto insurers and policyholders. Governor Daniel McKee signed the bill, known as HB 6054, into law on July 2, 2024, with the intention of enhancing fairness and transparency in vehicle property damage claims.

The new legislation enables claimants to invoke their right to appraisal when disputes arise over auto insurance claims. Under this law, both the insurer and the claimant must choose their own “disinterested Rhode Island licensed appraiser,” each bearing the cost of this choice. Insurers are required to complete the appraisal within four business days. If an insurer fails to meet this deadline, they lose the right to inspect the damaged vehicle prior to repairs, limiting negotiations solely to the pricing of labor and parts, unless the insurer provides objective evidence for any discrepancies regarding vehicle damage.

The law also outlines provisions for extending the appraisal timeframe if the auto body repair shop and the insurer mutually agree. Additionally, it describes a process for resolving discrepancies when two independent appraisals yield differing outcomes. This legislative measure addresses previous conflicts of interest, as insurers typically had a significant influence over the selection of an umpire in the appraisal processes.

HB 6054 received unanimous support in legislative committee, passing with a 4-0 vote among Democrats. The legislation mandates that all auto insurance policies in Rhode Island include a right to appraisal provision, a significant move toward consumer protection in the state’s auto insurance framework.

Currently, Rhode Island drivers face the highest auto collision repair costs in the United States, with average expenses reaching $1,987 in 2024. In stark contrast, Hawaii reports the lowest average collision repair costs at $410. As a result of rising insurance costs, approximately one in six drivers in Rhode Island has opted to drive without insurance. The state ranks fifth nationally in auto insurance expenses, with the increased collision repair costs attributed to various legislative measures implemented over recent years.

The trend of escalating insurance costs has prompted the Rhode Island General Assembly to consider multiple bills that could further increase costs for drivers, following a pattern of legislation known to contribute to high rates in recent years. In 2022, 14% of drivers nationwide were uninsured, and this figure has been projected to worsen. This surge in uninsured drivers directly impacts premiums for those who are insured, exacerbating the financial burden on these individuals.

In addition to the recent appraisal law, there are further consumer protection measures on the horizon. Starting January 1, 2026, insurers will be prohibited from imposing penalties or surcharges based solely on customer inquiries regarding their policies. This regulation aims to enhance the transparency of insurance practices and protect consumers in their dealings with insurance providers.

Overall, the new law governing the auto insurance appraisal process marks a significant shift in policy aimed at enhancing the rights of consumers while addressing the broader issue of rising auto insurance costs within the state. The changes are part of an ongoing effort to provide better consumer protections and to create a more equitable insurance landscape in Rhode Island.

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