Rhode Island Introduces Senate Bill S1015 for Insurance Reform

News Summary

Rhode Island has introduced Senate Bill S1015, reforming its Unfair Claims Settlement Practices Act to enhance consumer protections in the insurance sector. The bill emphasizes timely appraisals, consumer choice in payments, and stricter guidelines for total loss determinations. With over 30 unfair practices now defined, the legislation aims to bring transparency and equity to claims processing. This significant reform is currently under review by the Senate Judiciary Committee, with potential implications for policyholders and insurers alike.

Rhode Island has introduced Senate Bill S1015, a comprehensive reform aimed at updating the state’s Unfair Claims Settlement Practices Act. The bill was presented on May 2, 2025, and seeks to redefine unfair conduct within the insurance industry, establishing more robust requirements for claims handling and increasing transparency surrounding settlements.

The proposed bill focuses on more than 30 specific practices that would now be classified as unfair. Among these practices are the failure to conduct timely appraisals, refusal to honor direct payments authorized by policyholders to vendors, and misrepresentations regarding the terms of claim settlements or insurance policies. The legislation highlights the importance of equitable practices in the claims process, enhancing protections for consumers in Rhode Island.

One significant change included in Senate Bill S1015 is the extension of the appraisal window for auto body shops, increasing it from three to four business days for requesting inspections. Additionally, the threshold for requiring an appraisal has been raised from $2,500 to $5,000. This adjustment means that if insurers do not meet the new appraisal deadlines, they would forfeit the right to inspect damage before repairs. Consequently, any subsequent disputes would focus primarily on labor costs and parts pricing unless there is clear evidence to support a different claim.

The bill also addresses consumer choice by mandating that insurers comply with written “direction to pay” requests from policyholders. This provision allows for direct payments to licensed rental car companies, auto repair shops, or restoration firms, with a cap of $5,000 specifically allocated for property damage. By implementing this measure, the legislation seeks to prevent insurers from coercively steering clients towards preferred vendors, ensuring that policyholders have more control over their claims and repair processes.

Another critical area of reform relates to total loss determinations. Under Senate Bill S1015, vehicles cannot be classified as total losses unless the incurred repair costs exceed 75% of their fair market value. Any adjustments made to a vehicle’s value must be itemized and based on recognized industry guides to ensure fairness. This change aims to protect consumers from potentially unjust total loss determinations that could impact their insurance settlements.

Furthermore, the bill stipulates that insurers are responsible for compensating documented sublet services, including towing and diagnostics. Insurers would also be required to cover public adjusters’ fees up to 10% of the settlement amount if explicitly requested in writing by the insured party—adding another layer of transparency and consumer protection to the process.

The provisions outlined in Senate Bill S1015 will apply to all insurers managing claims for vehicles registered in Rhode Island, regardless of where the insurance policy was published. If the bill is enacted, it will take effect immediately following its approval.

Currently, Senate Bill S1015 is under review by the Senate Judiciary Committee. The outcome of this legislative proposal has the potential to significantly transform the landscape of claims processing in the insurance industry within Rhode Island, aligning it with contemporary practices that prioritize consumer rights, equitable treatment, and transparency.

As discussions continue, stakeholders will closely monitor the bill’s progress through the legislative process, assessing its implications for policyholders and the insurance industry alike.

Deeper Dive: News & Info About This Topic

• Insurance Business: Rhode Island’s New Bill Redefines Unfair Claims Settlement Practices for Insurers
• Nerdwallet: Homeowners Insurance in Rhode Island
• Forbes: Best Homeowners Insurance in Rhode Island
• Google Search: Rhode Island insurance claims
• Encyclopedia Britannica: Rhode Island