2013 -- S 0472

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LC01165

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO INSURANCE - MOTOR VEHICLE PROPERTY DAMAGE CLAIMS

SETTLEMENT ACT

     Introduced By: Senators Goodwin, and Ruggerio

     Date Introduced: February 28, 2013

     Referred To: Senate Judiciary

It is enacted by the General Assembly as follows:

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     SECTION 1. Title 27 of the General Laws entitled "INSURANCE" is hereby amended

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by adding thereto the following chapter:

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     CHAPTER 10.4

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MOTOR VEHICLE PROPERTY DAMAGE CLAIMS SETTLEMENT ACT

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     27-10.4-1. Legislative purposes. – The general assembly declares that it is concerned

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with ensuring fair claims settlement practices with regard to motor vehicle property damage

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claims. The purpose of this chapter is to set forth standards for the disposition of such claims as it

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relates to vehicles that are to be repaired in auto body repair shops in the state of Rhode Island.

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     The director of the department of business regulation shall promulgate rules and

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regulations not inconsistent with the purpose of this chapter.

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     27-10.4-2. Definitions. – For the purposes of this chapter:

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     (1) "Automobile body shop" means any establishment, garage, or work area enclosed

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within a building where repairs are made or caused to be made to motor vehicle bodies, including

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fenders, bumpers, chassis and similar components of motor vehicle bodies as distinguished from

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the seats, motor, transmission, and other accessories for propulsion and general running gear of

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motor vehicles, except as provided in section 5-38-20;

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     (2) "Claimant" means a person, other than the insured, who claims that the insured is

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legally liable to them for damages resulting from an act, occurrence or other covered event as a

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result of which the insured's policy may be obligated to provide coverage;

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     (3) "Insured" means the party named on a policy or certificate as the individuals with

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legal rights to the benefits provided by the policy;

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     (4) "Insurer" means any person, reciprocal exchange, interinsurer, Llyods insurer,

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fraternal benefit society, and any other legal entity engaged in the business of insurance,

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including agents, brokers, insurance producers, adjusters and third-party administrators. For the

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purposes of this chapter, the entities in this subdivision shall be deemed to be engaged in the

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business of insurance and subject to this chapter;

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     (5) "Motor vehicle" means any automobile, truck, or other self-propelled vehicle of any

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type; and

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     (6) "Person" means any natural or artificial entity including, but not limited to,

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individuals, partnerships, associations, trusts or corporations, or limited liability corporations.

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     27-10.4-3. Agreed price for repairs to motor vehicles . – (a) When determining the

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amount an insurer must pay for repair of a damaged motor vehicle, every insurer, agent, and

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employee must:

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     (1) Negotiate in good faith with an auto body shop chosen by an insured or claimant; and

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     (2) Reach an agreed price with the auto body shop chosen by the insured or claimant to

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repair the vehicle to pre-accident condition.

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     (i) In reaching an agreed price with the chosen auto body shop, an insurer must negotiate

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all aspects of the repair in good faith, including, but not limited to, the auto body labor rate

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charged by the auto body shop.

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     (b) If an insurer and an auto body shop do not reach an agreed price to repair the vehicle

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to pre-accident condition, the insurer may not:

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     (1) Delay concluding the claim and must promptly issue payment for the amount it

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determined;

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     (2) Require an insured or claimant to have the repairs performed at a different auto body

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shop;

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     (c) If an insurer and auto body shop do not reach an agreed price, the auto body shop may

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assert a civil action against the insurer, its employees and agents for all amounts in dispute and

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any other damages resulting thereto pursuant to section 27-10.4-6.

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     27-10.4-4. Penalties. -- For each violation of this chapter, the offending insurance

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company, its employees and agents, shall be fined a sum not to exceed five thousand dollars

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($5,000) by the department of business regulations.

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     27-10.4-5. Private actions. -- (a) Any insured or claimant, or licensed auto body repair

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facility may bring an action for money damages against an insurer, its employees and agents, as a

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result of the use or employment by an insurer, employee, agent, or person of a method, act or

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practice declared unlawful by section 27-10.4-3. Notwithstanding any provisions of the general or

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public laws to the contrary, all such actions may be brought in the small claims, district, and

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superior court of the state of Rhode island in the county in which the insurer maintains its

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principal place of business. If the insurer is a foreign entity, all such actions shall be brought in

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the county in which the party bringing the action resides.

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     (b) In any action brought under this section, in addition to the relief provided in this

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section, the court may award, in its discretion other equitable relief that it deems necessary or

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proper.

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     (c) Notwithstanding any provision of the general or public laws to the contrary, this

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section shall not be construed to prevent an insured or claimant from assigning its rights to an

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auto body shop for any claims arising out of the damage to its motor vehicle.

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     27-10.4-6. Severability. -- If any provision of this chapter or the application of the

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provision to any person or circumstances shall be held invalid, the remainder of the chapter and

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the application of the provision to any person or circumstances other than those as to which it is

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held invalid shall not be affected by the invalidity.

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     SECTION 2. This act shall take effect upon passage.

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LC01165

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO INSURANCE - MOTOR VEHICLE PROPERTY DAMAGE CLAIMS

SETTLEMENT ACT

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     This act would create the motor vehicle property manager settlement act to ensure fair

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claims settlement practices with regard to motor vehicle property damage claims.

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     This act would take effect upon passage.

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LC01165

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