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HB 7864

AN ACT RELATING TO INSURANCE -- MOTOR VEHICLE APPRAISAL PROVISION

2026 Regular Session Introduced by Matthew Dawson and 2 co-sponsors

Establishes a formal, time-bound independent appraisal process to settle motor vehicle loss disputes with an umpire, binding unless exceptions apply.

04/28/2026 Committee recommended measure be held for further study
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Bill Summary · HB 7864

Summary of HB 7864 (Rhode Island, 2026) — Motor Vehicle Appraisal Provision

Purpose and Intent

  • Establish a formal independent appraisal process for motor vehicle damage disputes between insureds/claimants and insurers when they cannot agree on the amount of loss.
  • Ensure a structured, time-bound mechanism to reach a final, binding determination on loss value, including an umpire if appraisers disagree.

Key Provisions and Changes

  • Independent Appraisal Trigger

    • If the insurer and the insured/claimant cannot agree on the loss amount, either party may trigger the appraisal process.
    • Each side must appoint a disinterested Rhode Island licensed appraiser at their own expense.

  • Appraiser Inspection Timeline

    • The insurer’s appraiser must inspect the damaged vehicle within 4 business days after written demand, provided the vehicle is on the repair shop premises at the time of the request.
    • If the insurer fails to inspect within 4 business days, the insurer forfeits the right to inspect before repairs. Negotiations then focus only on labor and parts price, not on existence of damage or repair method, unless evidence to the contrary is provided. Extensions may be made by mutual agreement.

  • Resolution of Disputes Between Appraisers

    • If the two appraisers cannot resolve the dispute, they must exchange their best proposals.
    • If proposals differ by 15% or less, the loss amount is the midpoint between the two proposals.
    • If proposals differ by more than 15%, within 3 business days the appraisers must provide the names of three disinterested RI licensed appraisers to each other to select an umpire.
    • If no agreement on an umpire, the insured/claimant may select an independent arbitration association (e.g., American Association of Arbitrators) to appoint an umpire.
    • The umpire must render a decision within 5 days of appointment.
    • The parties’ agreement or the umpire’s decision is binding, with exceptions for supplemental allowances for hidden damage, price increases, or other reasonable charges not yet paid.

  • Costs and Payees

    • If the final award exceeds the insurer’s original offer by more than 25%, the insurer reimburses all appraisal costs to the insured/claimant.
    • If the difference is 25% or less, the parties split the umpire costs.
    • Appraisers must comply with applicable Rhode Island laws/regulations; non-compliant appraisals are void.
    • A “disinterested Rhode Island licensed appraiser” must not have provided services or compensation to either party in the previous 30 days.

  • Definitions and Scope

    • “Insurer” includes entities defined under RI law.
    • An appraiser not qualifying as “disinterested” may be used only by mutual agreement of both parties.
    • The appraisal process does not waive other policy rights not part of the appraisal provision.
    • The insurer must honor a “direction to pay” when directed by the insured/claimant to pay the insured’s chosen appraiser and umpire appraiser directly.

  • Prohibited Conduct

    • The insurer may not engage in intimidation, coercion, threats, or misrepresentation of consumer rights in relation to the appraisal process.

  • Effective Date

    • The act takes effect upon passage.

Who Is Affected

  • Insurance companies offering motor vehicle collision/damage coverage in Rhode Island.
  • Insureds and claimants involved in property damage loss disputes with insurers.
  • Rhode Island licensed motor vehicle damage appraisers (disinterested appraisers) and umpire arbitrators.
  • Auto repair shops and related service entities involved in inspection timelines.

Procedural and Timeline Aspects

  • The process is triggered only when there is no agreement on loss amount.
  • Insurer’s appraiser inspection deadline: within 4 business days (with an on-premises condition).
  • Dispute resolution steps progress from mutual proposals to umpire appointment if needed, with specific timelines:
    • 3 business days to exchange umpire names if >15% difference.
    • Umpire appointment and decision within a tight 5-day window after appointment.
  • Cost sharing hinges on the magnitude of the final award relative to the insurer’s initial offer (thresholds at 25%).

Practical Implications

  • Aimed at expediting and formalizing appraisal disputes to reduce prolonged negotiations.
  • Clarifies payment flow by allowing direct payment to the insured’s appraiser and umpire when directed by settlement mechanics.
  • Introduces safeguards to prevent biased appraisers and ensures recourse if insurers fail to meet inspection deadlines.
  • Potentially shifts some out-of-pocket costs toward insurers if their offer is significantly rejected (25% or more).

Compiled from official sources — confirm details with the bill’s official record.

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