Increases the amount requiring that an appraisal be performed by a licensed appraiser when a vehicle sustains damage from $2,500 to an amount in excess of $5,000. This act also corrects a citation regarding salvage and reconstructed titles.
Impact
If passed, H7287 is expected to have a significant impact on the insurance industry and consumers in Rhode Island. The bill could potentially decrease the number of low-value claims that require formal appraisal, allowing insurers to allocate resources more effectively. However, it might also raise concerns among vehicle owners who suffer substantial damage that remains under the new threshold, as these claims could become more challenging to substantiate without a formal appraisal process.
Summary
House Bill 7287 aims to amend the Unfair Claims Settlement Practices Act by increasing the threshold requiring an appraisal for vehicle damage from $2,500 to an amount in excess of $5,000. This change is intended to reduce unnecessary appraisals in cases of minor vehicle damage, thereby expediting the claims process for insured parties and insurance companies alike. By elevating this threshold, it seeks to balance the workload of appraisers and improve efficiency within the insurance claims process while still protecting the rights of consumers in larger claims.
Contention
Key points of contention appear to be around the potential for diminished protections for consumers. Critics may argue that raising the appraisal threshold could lead to insurers underestimating vehicle damage, especially in cases where appraisals are necessary to ensure fair settlement of claims. This change could be seen as prioritizing insurer convenience over consumer rights, particularly for those whose vehicles have sustained damage that would have previously warranted an appraisal under the old threshold.