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S 3560Insurance

Insurance - Motor Vehicle Appraisal Provision

This bill lets people direct their auto insurance company to directly pay independent appraisers during a vehicle repair dispute.

Introduced
Population
Affected
35
Email Legislator
Introduced Jun 6, 2026Committee Senate Judiciary

Plain-English Summary

This bill updates the rules for when a person and their auto insurance company disagree on the cost to repair a damaged vehicle. It allows the vehicle owner to sign a "direction to pay" form, which tells the insurance company to directly pay the independent appraisers and any umpire involved in resolving the dispute. This saves the vehicle owner from having to pay these appraisers out of pocket and wait for reimbursement. It also explicitly prohibits insurance companies from intimidating, threatening, or misleading consumers during the appraisal process.

For younger readers

Sometimes, when a car gets in a crash, the car owner and the insurance company disagree on how much it will cost to fix it. When this happens, they hire experts called appraisers to figure out the fair price. This bill makes a new rule so the car owner can tell the insurance company to pay those experts directly. This way, the car owner doesn't have to use their own money first. It also makes sure insurance companies are nice and don't bully people while figuring out the cost.

Who & Where It Applies

Impacted groups
Car ownersAuto insurance companiesMotor vehicle damage appraisersAuto body repair shopsArbitrators and umpires
Impacted communities
All

Constitutional & Fiscal Check

None Likely. The bill regulates private insurance contracts and auto damage appraisal processes, which are standard areas of state regulatory authority. It does not infringe upon free speech, due process, or protection from unreasonable searches and seizures.

Estimated cost
None
Estimated revenue
None

Bill Analysis

Both viewpoints
For Progressives
  • Protects consumers from corporate abuse by explicitly prohibiting insurance companies from intimidating, threatening, or misleading individuals during the auto damage appraisal process.
  • Helps lower-income individuals by allowing the insurance company to directly pay the appraisers, removing the burden of upfront out-of-pocket costs for the consumer.
  • Levels the playing field between everyday citizens and large insurance corporations by ensuring a fair, independent dispute resolution process for vehicle damage claims.
  • Does not mandate that insurance companies cover all appraisal costs by default, potentially leaving financially disadvantaged consumers responsible for half the umpire fees if the award difference is small.
  • Fails to impose specific statutory penalties or fines on insurance companies that violate the anti-intimidation and coercion provisions, weakening the enforcement of consumer protections.
  • Relies on private arbitration and independent appraisers rather than a fully funded public consumer protection ombudsman to resolve disputes, which can still be difficult for average citizens to navigate.
For Conservatives
  • Promotes freedom of contract by allowing consumers to execute a "direction to pay" to explicitly manage how and to whom their insurance payouts are distributed.
  • Creates a structured, private-sector arbitration process using independent appraisers and umpires to resolve disputes without unnecessarily burdening the public court system.
  • Sets clear, objective mathematical thresholds, such as the fifteen percent and twenty-five percent rules, to determine payment responsibilities and provide predictability for businesses.
  • Imposes strict timelines and mandates on insurance companies, such as forcing them to inspect a vehicle within four days or forfeit their right to dispute certain damages.
  • Mandates that insurance companies must honor the "direction to pay," restricting the corporation's freedom to manage its own internal payment and claims processes.
  • Forces insurance companies to pay the consumer's appraisal costs if the final award exceeds the original offer by more than twenty-five percent, penalizing the business.

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.