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SB 3365

AN ACT RELATING TO INSURANCE -- MOTOR VEHICLE APPRAISAL PROVISION

2026 Regular Session Introduced by Hanna Gallo

Establishes a binding, time‑bound independent appraisal process for disputed auto loss amounts, with rapid inspections, umpire decisions, and clear cost rules.

06/11/2026 Senate read and passed
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WeVote Research Nonpartisan
Bill Summary · SB 3365

Summary of SB 3365 (Rhode Island, 2026)

Purpose and intent

  • Establishes an independent motor vehicle appraisal process when there is a dispute between an insured/claimant and an insurer over the amount of a loss.
  • Aims to provide a structured, time-bound path to resolve vehicle damage claims without immediate litigation.

Key provisions and changes

  • Eligibility and process

    • If the insurer and the insured/claimant cannot agree on the loss amount, either party may invoke the independent appraisal process.
    • Each side selects its own disinterested Rhode Island licensed appraiser at their own expense.
    • The insurer’s appraiser must inspect the damaged vehicle within four (4) business days after written demand, provided the vehicle is on the repair shop premises when requested.
    • If the insurer’s appraiser fails to inspect within four business days, the insurer forfeits the right to inspect prior to repairs. Negotiations then focus only on labor and parts costs, excluding disputes about existence of damage or repair method, unless objective evidence to the contrary is provided. Extensions are allowed by mutual agreement.

  • Appraisal dispute resolution

    • If appraisers cannot agree, they submit their best proposals to resolve the disagreement.
    • If proposals differ by 15% or less, the loss amount is the midpoint of the two proposals.
    • If proposals differ by more than 15%, a three-person list of disinterested RI-licensed appraisers is generated, and the appraisers attempt to select an umpire from among them.
    • If the parties cannot agree on an umpire, the insured/claimant may choose an independent arbitration association (e.g., American Association of Arbitrators) to provide one.
    • The umpire must render a decision within five (5) days of appointment.
    • The agreement or umpire decision is binding, with limited allowances for hidden damage, price changes, or other reasonable charges not yet paid.

  • Costs and compliance

    • If the final award exceeds the insurer’s initial offer by more than 25%, the insurer must reimburse all appraisal costs to the insured/claimant.
    • If the difference is 25% or less, the costs of the umpire are shared.
    • Appraisers must comply with applicable Rhode Island laws/regulations; non-compliant appraisals are void.
    • A “disinterested Rhode Island licensed appraiser” must be licensed in RI and have not engaged in recent appraisals or received compensation from either party in the prior 30 days.
    • Parties may mutually agree to accept an appraiser who does not meet the standard disinterested criteria.

  • Definitions and protections

    • Clarifies “insurer” to include entities defined under existing RI law.
    • Appraisers not meeting disinterested criteria may still be used if both parties agree.
    • Neither party may waive non-appraisal policy rights.
    • Insurers cannot oppose a “direction to pay” where the insured/claimant instructs direct payment to the chosen appraiser and the umpire, if applicable.

  • Prohibition on insurer conduct

    • Prohibits intimidation, coercion, threats, or misrepresentation of consumer rights related to the appraisal process.

Who is affected

  • Insureds and claimants involved in motor vehicle damage claims where there is a dispute over loss amount.
  • Insurance companies operating in Rhode Island.
  • Rhode Island-licensed motor vehicle damage appraisers (disinterested appraisers) and umpire/arbitration entities involved in the process.

Procedural and timeline aspects

  • Appraiser inspection window: within 4 business days (insurer’s appraiser) after written demand.
  • If insurer misses the inspection window, negotiations shift focus and timeframes may be extended by mutual agreement.
  • Umpire decision deadline: within 5 days of appointment.
  • Cost allocation: potential full reimbursement to insured/claimant if final award > 25% above insurer’s initial offer; otherwise costs split.
  • Effective date: to take effect upon passage of the act.

Practical impact and considerations

  • Creates a formal, quicker-adjudication mechanism for disputed loss amounts in auto claims.
  • Seeks to reduce delays and litigation associated with appraisal disputes.
  • Places an emphasis on timely inspections and a binding, structured process with clear cost-sharing rules.
  • Balances interests by allowing mutual agreement on non-standard appraisers and ensuring compliance with licensing and regulatory standards.

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

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