Rhode Island Gov. Daniel McKee recently signed a bill into law that changes the process for appraisals in the state. 

The act was introduced as HB 6054 in March. It was passed by the House on June 20 and the Senate on June 21. McKee signed it July 2. It became effective upon its passage. 

After the appraisal clause is enacted, the insurance company’s appraiser now has four days to inspect the vehicle. Previously, the insurance company appraiser had three days. If it is not inspected by this deadline, the insurance company forfeits its right to inspect the 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 law additionally provides an opportunity for the time limitations to be extended by mutual agreement between the auto body repair shop and the insurer.

The new law provides details on how to decide the amount of loss. It states that if the proposals by the appraisers differ by 15% or less, the amount of the loss shall be the midpoint between them. 

If the loss is more than 15%, the appraisers shall submit the names of three disinterested Rhode Island-licensed appraisers to each other within three days. The appraisers will agree on one of the proposed candidates to act as an umpire, or, if they can’t agree, an independent association for arbitration, such as the American Association of Arbitrators, will provide an umpire. 

The umpire has five days to make a decision, according to the new law. 

Previous Rhode Island law also did not define who should cover the appraisal cost. 

The new law states that if the insured or claimant initiates the provision and the final award exceeds the insurer’s original offer by more than 25%, the insurer must reimburse all of the insured’s or claimant’s  appraisal costs. If the difference is less than 25% the parties shall split the cost of the umpire. 

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

After years of lobbying, Washington and Texas recently passed right-to-appraisal bills. 

Washington’s bill was amended to strike language that would’ve required insurance companies to reimburse policyholders for the appraisal process if the loss determined through the process is $500 or more than what the insurance company adjusted. Advocates for the bill expressed concerns that it would not have passed without the amendment.

Another appraisal bill was introduced in New Jersey in May. It remains in committee.

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Photo of Rhode Island Statehouse courtesy of Alex Potemkin/iStock

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