A newly introduced bill in Rhode Island could significantly change how insurers process claims in the state. Senate Bill S1015, introduced on May 2, 2025, proposes a sweeping update to the state’s Unfair Claims Settlement Practices Act, redefining unfair conduct and creating stricter requirements for claims handling, vehicle repairs, and settlement transparency.
The bill lays out more than 30 specific practices that would be classified as unfair, including failure to conduct timely appraisals, refusal to honor policyholder-authorized direct payments to vendors, and misrepresentations related to claim settlement or policy terms.
Key provisions include extending the appraisal window from three to four business days for auto body shops requesting inspections and raising the appraisal requirement threshold from $2,500 to $5,000. Insurers would also forfeit the right to inspect damage prior to repairs if they miss the appraisal deadline, limiting disputes to labor costs and parts pricing unless clear evidence is provided.
Under the proposed law, insurers must comply with written “direction to pay” requests from policyholders to remit benefits directly to licensed rental car companies, auto repair shops, or restoration firms—subject to a $5,000 limit for property damage. These provisions reinforce consumer choice and prohibit steering clients to preferred vendors through coercive or misleading tactics.
The bill also addresses how insurers determine total loss. Vehicles could not be declared total losses unless repair costs exceed 75% of their fair market value based on industry-standard valuation manuals. Any adjustments to that value must be itemized, fair, and based on recognized guides.
Additional sections clarify insurers’ obligations to compensate for documented sublet services, including towing, alignments, diagnostics, and OEM-recommended repairs. They must also pay public adjusters’ fees - up to 10% of the settlement - when directed in writing by the insured.
Importantly, these rules would apply to all insurers handling claims on Rhode Island-registered vehicles, regardless of where the policy originated, ensuring uniform standards across state lines.
If enacted, Senate Bill S1015 would take effect immediately. The legislation is currently pending review in the Senate Judiciary Committee.
