S 3194Insurance

Insurance - Motor Vehicle Insurance - Mandatory Arbitration Provision

This bill raises the maximum claim limit for electing arbitration in motor vehicle accidents from $50,000 to $100,000.

Held for study

Population
Affected

Introduced Apr 3, 2026Committee Senate Judiciary

Plain-English Summary

This bill increases the maximum claim amount that a person can choose to resolve through arbitration rather than going to court for a motor vehicle accident. Previously, a person suffering property damage, bodily injury, or death from a car accident could elect to use arbitration if their claim was for $50,000 or less. This legislation raises that limit to $100,000.

For younger readers

When people get into a car crash, they sometimes argue about who should pay for the damage or injuries. Instead of going to a judge in a big courtroom, they can use something called "arbitration," where an expert listens to both sides and decides what is fair. Before, you could only choose to do this if you were asking for $50,000 or less. This new rule changes that number so you can use arbitration if you are asking for up to $100,000.

Who & Where It Applies

Impacted groups

Accident victimsInsurance companiesDriversArbitratorsPersonal injury lawyers

Impacted communities

All

Constitutional & Fiscal Check

None Likely. The bill simply increases the threshold for electing arbitration in motor vehicle claims. It explicitly preserves the right to a jury trial for both parties if they are dissatisfied with the arbitrator's decision, so it does not infringe upon due process or Seventh Amendment rights.

Estimated cost

None

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Expanding access to arbitration for higher-value claims can help lower-income individuals resolve disputes faster and with fewer legal fees than a traditional court trial.
Reduces the burden on the public court system, freeing up judicial resources to handle other important civil rights or community welfare cases.
Empowers victims of motor vehicle accidents to seek fair compensation up to $100,000 without being intimidated or outspent by large corporate insurance companies in a lengthy court battle.
Arbitration proceedings can sometimes be less transparent than public court trials, potentially hiding systemic abuses by large insurance companies from public scrutiny.
Lower-income plaintiffs might still struggle to afford the shared expenses of arbitration, which are required by the rules of the court-annexed program.
The informal nature of arbitration might disadvantage plaintiffs who lack high-quality legal representation when facing off against the experienced lawyers of wealthy insurance corporations.

For Conservatives

Promotes a more efficient and cost-effective resolution process for civil disputes, reducing the financial burden on the state's judicial system.
Helps insurance companies and businesses avoid the unpredictable and potentially exorbitant jury verdicts often seen in traditional court trials.
Encourages private dispute resolution over government-run court interventions, aligning with the conservative preference for smaller government footprints.
Mandates that insurance carriers must offer this arbitration provision in every motor vehicle liability contract, placing a government restriction on corporate freedom and the freedom to contract.
By doubling the threshold to $100,000, insurance companies may face a higher volume of binding arbitration claims, potentially increasing their operational costs.
Limits the ability of defendants (often insured by private corporations) to immediately utilize the traditional court system and rules of evidence to defend themselves against larger claims up to $100,000.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 3 additions · 1 deletion

SECTION 1. Section 27-10.3-1 of the General Laws in Chapter 27-10.3 entitled "Motor Vehicle Insurance — Mandatory Arbitration Provision" is hereby amended to read as follows: 27-10.3-1. Arbitration provision.

(a) Every contract of motor vehicle liability insurance, issued in the state by an insurance carrier authorized to do business in the state, shall contain the following provisions:

(1) Any person, referred to in this section as “the plaintiff,” suffering a loss, allegedly resulting out of the ownership, maintenance, or use of a motor vehicle by an insured or self-insured, and allegedly resulting from liability imposed by law for property damage, bodily injury, or death, may, at the plaintiff's election, whenever the claim is for ~~fifty thousand dollars ($50,000)~~ one hundred thousand dollars ($100,000) or less, submit the matter to arbitration pursuant to chapter 3 of title 10;

(2) Selection of arbitrator. After submission to arbitration by the plaintiff, one arbitrator shall be selected from the list of qualified arbitrators of the court annexed arbitration program of the superior court in the same manner as arbitrators are selected in accordance with the rules of that program. Each party shall share the expenses of arbitration in accordance with the rules of the court annexed arbitration program;

(3) Hearings. The arbitrator shall call a hearing and provide seven (7) days’ notice of the time and place of the hearing to the parties. The hearing shall be informal, and the rules of evidence prevailing in judicial proceedings shall be binding. Any and all documentary evidence and other data deemed relevant by the arbitrator may be received in evidence. The arbitrator shall have the power to administer oaths and to require by subpoena the attendance and testimony of witnesses, and the production of books, records, and other evidence, relative or pertinent to the issues presented to them for determination. The decision of the arbitrator shall be binding upon the parties unless:

(i) In the event that suit has not been instituted, either party reserves the party’s right to a jury trial by giving notice of this reservation of right to the other party or parties and to the arbitrator within sixty (60) days of the arbitrator’s award by certified mail return receipt requested; or

(ii) In the event that suit has been instituted, either party files a request for a jury trial with the court and with notice to the other party or parties within sixty (60) days of the arbitrator’s award. If the case proceeds to trial subsequent to arbitration, the decision of the arbitrator shall not be admissible;

(4) Statute of limitations. Notwithstanding the foregoing, a suit shall be instituted in order to bring the action within any applicable statute of limitations, but the suit will be stayed until an arbitrator’s award has been made or the case reached for trial;

(5) Agreements to arbitrate. Uninsured motorist contracts shall be governed by the provisions of § 10-3-2.

(b) Every person who maintains motor vehicle liability insurance shall, when making an application for a motor vehicle operator’s license, or the renewal of that license, or when registering a motor vehicle, agree in writing on a form provided by the director of the department of transportation to be bound by the provisions of this chapter.

SECTION 2. This act shall take effect upon passage.