Rhode Island Introduces Strict Appraisal Deadlines for Insurers
Rhode Island has enacted a new law that puts insurers on a tight schedule to appraise damaged vehicles, significantly impacting how motor vehicle claims are handled. The updated Motor Vehicle Appraisal Provision (H6054), now in effect, mandates that insurers have their appraiser inspect a damaged vehicle within four business days after receiving a written demand – provided the vehicle is at the repair shop.
Failure to meet this deadline results in the insurer losing the right to inspect the vehicle before repairs commence. Consequently, negotiations will be limited to labor and parts prices unless the insurer can present solid evidence to challenge the damage or repair method. This change marks a significant shift for insurance professionals, necessitating more streamlined processes to ensure compliance.
The new law also imposes stricter standards on appraisers. They must be licensed in Rhode Island and cannot have had any affiliations with either party involved in the claim within the last 30 days, unless both parties agree to the arrangement. Furthermore, the law alters the dispute resolution process. If the loss estimates from both parties’ appraisers differ by 15% or less, the final figure will be set at the midpoint. For larger discrepancies, an umpire must be appointed, either by mutual agreement or through an arbitration organization like the American Association of Arbitrators. The umpire is required to make a decision within five business days of appointment.
An important financial implication of this law is the potential cost risk for insurers. If the final award exceeds the insurer’s original offer by more than 25%, the insurer is required to cover all of the insured’s appraisal costs. If the increase is 25% or less, the costs of the umpire will be split between the parties. Introduced by Representatives Baginski, Kazarian, Corvese, and Casey, this legislation sends a clear message: insurers must act swiftly and fairly in the appraisal process, or face consequences that could affect both their operational processes and financial bottom line.
