Skip to main content
H 7864Insurance

Insurance - Motor Vehicle Appraisal Provision

This bill establishes a specific independent appraisal process and timeline to resolve vehicle damage disputes between insurers and car owners.

Held for study
Population
Affected
35
Email Legislator
Introduced Feb 27, 2026Committee House Corporations

Plain-English Summary

This legislation amends the process for resolving disputes between vehicle owners and insurance companies regarding the cost of damage repairs or total loss value. It establishes a right to an independent appraisal process where both parties select a disinterested, licensed appraiser. If the appraisers cannot agree, they must select a neutral umpire to make a binding decision. The bill sets strict timelines for inspections, defines exactly who qualifies as a "disinterested" appraiser, and mandates that insurance companies pay the consumer's appraisal costs if the final valuation is significantly higher than the insurer's original offer.

For younger readers

When a car gets into an accident, the owner and the insurance company have to agree on how much money it costs to fix it. Sometimes, the insurance company offers an amount that is too low. This new rule says that if they disagree, they both have to pick a special helper called an appraiser to look at the car. These helpers try to agree on a fair price. If they can't agree, a third person decides the final price. It also says the insurance company has to be fair and quick, or they might have to pay extra money.

Who & Where It Applies

Impacted groups
Car ownersInsurance companiesAuto body repair shopsLicensed motor vehicle appraisersAccident victims
Impacted communities
All

Constitutional & Fiscal Check

None Likely

Estimated cost
None
Estimated revenue
None

Bill Analysis

Both viewpoints
For Progressives
  • Empowers everyday consumers to challenge low settlement offers from large insurance corporations by providing a structured, legally binding mechanism to demand fair market value for their damaged property.
  • Includes specific anti-abuse language prohibiting insurance companies from engaging in intimidation, coercion, threats, or misrepresentation of rights against policyholders during the claims process.
  • Shifts the financial burden to the corporation by mandating that the insurer reimburse the claimant's appraisal costs if the final award exceeds the insurer's original offer by more than twenty-five percent.
  • Requires the consumer to initially select and pay for their own licensed appraiser, creating an upfront financial barrier that may make this remedy inaccessible to low-income individuals who cannot afford the immediate out-of-pocket expense.
  • Relying on binding arbitration and umpires effectively privatizes the justice system, removing disputes from public courts where legal precedents are set and transparency is higher.
  • The strict definition of a "disinterested" appraiser (someone who hasn't been paid by the party in 30 days) may severely limit the pool of available professionals, making it difficult for consumers to find qualified help in a timely manner.
For Conservatives
  • Promotes the protection of private property rights by ensuring vehicle owners have a robust mechanism to secure the actual value of their assets rather than accepting arbitrary corporate valuations.
  • Encourages private dispute resolution through arbitration rather than utilizing the taxpayer-funded court system, potentially reducing the backlog and cost of civil litigation in the state.
  • Establishes clear, mathematical rules for resolving financial discrepancies (such as the midpoint calculation), providing business predictability and efficiency in contract enforcement.
  • Imposes heavy government regulations on private businesses by dictating strict inspection timelines (4 days) and forcing specific payment structures, interfering with the free market operations of insurance companies.
  • Violates the freedom of contract by overriding the terms agreed upon in the insurance policy and mandating specific appraisal procedures and definitions that the insurer did not consent to.
  • Penalizes businesses by forcing them to pay for the opposing party's appraisal fees based on a valuation difference, effectively redistributing wealth from the company to the claimant for a good-faith business disagreement.

Votes

Loading votes...

Full Bill Text

Changes to existing Rhode Island law · 4 additions

SECTION 1. Section 27-10.4-1 of the General Laws in Chapter 27-10.4 entitled "Motor Vehicle Appraisal Provision" is hereby amended to read as follows: 27-10.4-1. Motor vehicle appraisal provision.

(a) When the insurance company and the insured or claimant shall fail to agree as to the amount of the loss, the insured or claimant has the right to exercise the independent appraisal process outlined in this section.

(1) The insured or claimant, and the insurer, shall each select their own disinterested Rhode Island licensed appraiser at their own expense. The insurer’s chosen appraiser shall inspect the damaged motor vehicle within four (4) business days after the written demand is received, provided the damaged motor vehicle is on the premises of the repair shop when the request is made.

(2) If the insurer’s appraiser fails to inspect the damaged motor vehicle within four (4) business days the insurer shall forfeit its right to inspect the damaged vehicle prior to repairs, and negotiations shall be limited to labor and the price of parts and shall not, unless objective evidence to the contrary is provided by the insurer, involve disputes as to the existence of damage or the chosen manner of repair. The time limitations set forth in this subsection may be extended by mutual agreement between the auto body repair shop and the insurer.

(b) If the two (2) appraisers are unable to resolve the dispute between the insurance company and the insured or claimant, then the two (2) appraisers shall submit to each other their best proposal to resolve the disagreement.

(1) If the proposals differ by fifteen percent (15%) or less, the amount of the loss shall be the midpoint between them.

(2) If the proposals differ by more than fifteen percent (15%), then, within three (3) business days, the appraisers shall submit the names of three (3) disinterested Rhode Island licensed appraisers to each other. The appraisers will endeavor to agree on the selection of one of the proposed candidates to act as umpire.

(3) In the event the parties are unable to agree on a candidate to act as umpire, the insured or claimant shall choose an independent association for arbitration such as the American Association of Arbitrators or similar association to provide an umpire.

(4) The umpire shall render a decision within five (5) days of appointment.

(5) The agreement by the parties, or the umpire’s decision, will be binding on the parties, except for supplemental allowances for hidden damage, parts price increases, or any other reasonable charges related to the loss that have not already been paid for.

(6) If the insured or claimant initiates this appraisal provision and the final award exceeds the insurer’s original offer by more than twenty-five percent (25%), the insurer must reimburse all of the insured or claimant’s appraisal costs. If the difference is less than twenty-five percent (25%) the parties shall split the cost of the umpire.

(7) If the appraiser selected by the insurer, insured, or claimant does not comply with the provisions of § 27-9.1-4 and chapter 10.1 of this title or any other applicable Rhode Island law or regulation, their appraisal shall be deemed null and void and excluded from consideration from the umpire.

(8) For the purposes of this section a “disinterested Rhode Island licensed appraiser” means a motor vehicle damage appraiser licensed pursuant to chapter 10.1 of this title who has not performed an appraisal, received payment or compensation of any type from the claimant or insured, or the insurer, in the previous thirty (30) days.

(9) For the purposes of this section an “insurer’' means any “insurer” as defined in § 27- 9.1-2.

(10) Any appraiser that does not qualify as a “disinterested Rhode Island licensed appraiser” may be allowed by mutual agreement of both the parties.

(11) Neither party shall waive any rights under the applicable insurance policy which are not part of the appraisal process.

(12) The insurer shall not refuse to honor a "direction to pay" executed by an insured or claimant, indicating that the insured or claimant wishes to have the insurance company directly pay the insured's chosen appraiser and the umpire appraiser, if applicable.

(c) The insurer shall not engage in any act or practice of intimidation, coercion, threat, or misrepresentation of consumer rights, for or against an insured person, claimant, or entity chosen in this process.

SECTION 2. This act shall take effect upon passage.