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S 3365Insurance

Insurance - Motor Vehicle Appraisal Provision

This bill allows vehicle owners to have their insurance company directly pay independent auto damage appraisers during a dispute.

On the floor33 Yea4 Nay1 Not voting
Population
Affected
35
Email Legislator
Introduced Jun 6, 2026Committee Senate Judiciary

Plain-English Summary

This bill updates the independent appraisal process used when an insurance company and a vehicle owner disagree on the cost to repair a damaged vehicle. It requires insurance companies to honor a "direction to pay" request, meaning the vehicle owner can instruct the insurance company to directly pay the independent appraiser and the umpire involved in resolving the dispute. Additionally, the bill prohibits insurance companies from engaging in intimidation, coercion, threats, or misrepresentation of consumer rights against the insured person, claimant, or any entity chosen during this appraisal process.

For younger readers

Sometimes, a car gets broken, and the person who owns the car disagrees with their insurance company about how much money it will cost to fix it. When this happens, they hire special experts called appraisers to figure out the fair price. This bill says the car owner can tell their insurance company to pay these experts directly instead of the car owner having to pay them first. It also makes a rule that insurance companies are not allowed to bully or threaten anyone while figuring out the cost to fix the car.

Who & Where It Applies

Impacted groups
Vehicle ownersAuto insurance companiesMotor vehicle damage appraisersAuto body repair shopsInsurance claimants
Impacted communities
All

Constitutional & Fiscal Check

None Likely

Estimated cost
None
Estimated revenue
None

Bill Analysis

Both viewpoints
For Progressives
  • Protects consumers from corporate abuse by explicitly prohibiting insurance companies from using intimidation, coercion, or threats during the appraisal process.
  • Reduces the out-of-pocket financial burden on working-class individuals by allowing them to direct the insurance company to pay the independent appraisers directly, avoiding upfront costs.
  • Levels the playing field between large, powerful insurance corporations and everyday citizens by strengthening the independent dispute resolution process.
  • Fails to impose strict, specific financial penalties or regulatory consequences on insurance companies that violate the anti-intimidation provisions.
  • Does not guarantee that the insurance company covers the entire cost of the appraisal in all situations, leaving lower-income individuals potentially liable for umpire costs if the final award isn't 25% higher than the original offer.
  • Does not provide state-funded public advocates to assist consumers in navigating the complex arbitration and appraisal process against well-funded insurance corporations.
For Conservatives
  • Promotes a private, market-based arbitration process (using independent appraisers and umpires) to resolve disputes without requiring direct government intervention or court trials.
  • Supports small businesses, specifically independent auto body repair shops and licensed appraisers, by ensuring they can be paid directly and promptly by the insurance company.
  • Maintains the sanctity of private contracts by stipulating that neither party waives any rights under the applicable insurance policy outside of the appraisal process.
  • Places additional mandates on private insurance companies by forcing them to honor "direction to pay" requests, infringing on corporate operational freedom.
  • Exposes insurance companies to vague regulatory risks by introducing broad, subjective prohibitions against "misrepresentation" or "coercion" without strict legal definitions.
  • Could lead to increased insurance premiums for all consumers if the mandatory direct payment of independent appraisers encourages more frequent and costly appraisal disputes.

Votes

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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 under § 27-10.4-1.

(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.