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SB 3115

AN ACT RELATING TO INSURANCE -- UNFAIR CLAIMS SETTLEMENT PRACTICES ACT

2026 Regular Session Introduced by Frank Ciccone and 1 co-sponsor

Rhode Island SB 3115 sets clearer total-loss thresholds (75–85% of fair market value) and strengthens protections against unfair auto-claim practices for consumers.

06/26/2026 Effective without Governor's signature
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WeVote Research Nonpartisan
Bill Summary · SB 3115

Summary of SB 3115 (Rhode Island, 2026) – Unfair Claims Settlement Practices Act

Main purpose and intent

  • The bill amends the Rhode Island Unfair Claims Settlement Practices Act (Chapter 27-9.1) to strengthen protections for insurance claimants and clarify procedures in the handling of claims.
  • A key change is to modify how total-loss determinations are made for damaged vehicles, establishing clearer thresholds tied to the vehicle’s fair market value and giving consumers a designated threshold for declaring total loss.

Key provisions and changes

  • Unfair claims practices definitions (27-9.1-4(a)): The bill expands or codifies a broad list of prohibited insurer practices that constitute unfair claims practices if done in violation of the related statute (27-9.1-3). Notable elements include:
    • Misrepresentation of facts or policy provisions.
    • Delays or failures in acknowledging, investigating, or promptly settling claims.
    • Settling or offering amounts less than what a reasonable insured would expect, given coverage and policy terms.
    • Requiring suit to recover amounts due under policies.
    • Inadequate or misleading communications about coverage, denial, or basis for settlement.
    • Improper handling of evidence, appraisal, and repair-related costs.
    • Insurer practices around rental car directions to pay and direct payments to repair facilities or body shops, consistent with licensing requirements.
    • Requirements and handling related to appraisals, including timing, method, and use of industry-standard tools or manuals.
    • Procedures around sublet services, salvage and restoration costs, and the use of public adjusters.
    • Specific prohibitions related to coercion, threats, or misrepresentation of consumer rights.
  • Direct pay and repair choices (a(18), a(19), a(31), a(32), a(33)):
    • Insurers must honor “directions to pay” where the insured or claimant directs direct payment to a rental car company, auto body shop, or restoration company, subject to licensing and policy provisions. Insurers may chair contesting amounts charged and must notify relevant parties.
    • Provisions clarify payment directs to auto body shops and restoration companies, with caps and licensing (e.g., restoration payments capped at $5,000 and requiring proper licensing).
    • When an insured chooses a shop (out of insurer’s preferred list), insurers cannot automatically discount or limit repairs based on the insurer-chosen shop’s typical costs.
  • Auto body repair and appraisal standards (a(20)-(27)):
    • Insurers must use updated, complete appraisal practices and cannot rely on partially or selectively used manuals or systems.
    • Appraisals must be performed by licensed appraisers unaffiliated with the repair facility for damage estimated above $2,500, with on-site inspections (not based solely on photos).
    • Appraisal timing requirements: insurers’ appraisers must schedule within set business days, with consequences (forfeiture of inspection rights and restricted negotiations to labor/parts) if not met.
  • Vehicle total loss determination (a(29)):
    • The bill limits insurers from designating a vehicle a total loss when the repair cost is less than 75% to 85% of the vehicle’s fair market value (FMV).
    • Consumers may designate a vehicle as total loss when the threshold is met but below 85% FMV.
    • If a total loss designation occurs, FMV determinations, salvage titles, and related processes must follow set standards, with required written notices and disclosures to the vehicle owner.
    • The option exists for insurers to agree to deem a vehicle a total loss at the owner’s request if the repair cost is under the 85% FMV threshold.
    • All FMV adjustments must be transparent, itemized, fair, and in line with industry standards; salvage and disposal requirements must be clearly communicated.
  • Public adjusters and licensing (a(33)):
    • If a claim is settled with a public adjuster, the insurer must issue a separate check to the insured and to the public adjuster (for the public adjuster’s fee, up to 10%), with a properly signed “direction to pay” containing required information.
  • General and procedural clarifications (b):
    • Certain subsections do not interfere with an auto body repair facility’s contracts with insurers.
    • Direct repair programs (DRP) or similar programs may exempt or modify applicability of certain requirements.
    • If the insured or claimant uses a preferred shop, insurers must not limit or discount costs based on the charges that would have been incurred had the vehicle been repaired by the insurer’s shop.

Affected parties

  • Policyholders and claimants under Rhode Island domestic and possibly out-of-state policies covering Rhode Island-registered vehicles repaired in Rhode Island.
  • Insurers operating in Rhode Island, including auto insurers, homeowners, and commercial insurers handling auto claims.
  • Auto body repair shops, DRPs, and affiliated mechanics.
  • Auto body and restoration service providers, including sublet vendors.
  • Public adjusting professionals licensed under Rhode Island law.
  • Rental car providers and licensees involved in vehicle replacement services.

Procedural and timeline aspects

  • Effective date: Upon passage (immediate implementation once enacted).
  • Appraisal timing: Insurers’ appraisers must schedule with shops within specified business days; full appraisals must occur within three business days of request, with supplements within four days. Failure to meet deadlines may restrict insurer inspection rights and constrain negotiations.
  • Documentation and notices: The act emphasizes timely provision of forms, explanations of denial or compromise, and explicit directions for pay arrangements, with required information and signatures.
  • Threshold-based determinations: The total loss and FMV thresholds introduce a procedural framework for when a vehicle is declared a total loss, including owner consent and salvage requirements.

Practical impact

  • Aims to curb unfair claim practices by insurers, increase transparency, and provide stronger consumer protections in auto claim settlements.
  • Provides clearer rules on total-loss determinations, direct payments, appraisal standards, and public adjuster payments.
  • Enhances accountability for timely responses, proper documentation, and fair compensation based on industry-standard valuation tools.

Note: The bill includes an accompanying explanation noting the total-loss threshold changes as a central consumer protection feature.

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

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