Rhode Island Code of Regulations › Title 230 - Department of Business Regulation › Chapter 20 - Insurance › Subchapter 40 - Claims › Part 2 - Unfair Property/Casualty Claims Settlement Practices › Section 230-RICR-20-40-2.8 - Standards for Prompt, Fair and Equitable Settlements Applicable to Automobile Insurance

Current through June 14, 2024
A. Total Loss
				  Vehicles
1. Pursuant to R.I. Gen. Laws §
											27-9.1-4(25) an
				  insurer may not designate a vehicle a total loss if the cost to rebuild or
				  reconstruct the motor vehicle to pre accident condition is less than 75% of the
				  fair market value of the motor vehicle immediately preceding the time it was
				  damaged unless the requirements of §
											2.8(A)(3)   of this Part are
				  met.
2. Fair market value means the
				  retail value of the motor vehicle as set forth in a current edition of a
				  nationally recognized compilation of retail values commonly used by the
				  automotive industry to establish values of motor vehicles.
a. To qualify as "nationally recognized
				  compilation of retail values commonly used by the automotive industry," a
				  filing must be made with the Department requesting that the entity be deemed to
				  qualify under R.I. Gen. Laws §
												27-9.1-4(25). The
				  filing may be made by the entity itself or any person seeking qualification of
				  an entity for this purpose.
b. The
				  Department reviewed the initial filings and published a bulletin in 2014
				  identifying two entities that initially qualified. The bulletin will be updated
				  as entities are added or removed due to changes in circumstances.
c. Applications requesting to add entities
				  may be filed at any time and will be addressed by the Department in due course.
				  The Department will publish information relating to future filings on its
				  website.
3. If the total
				  cost to rebuild or reconstruct the motor vehicle is less than 75% the vehicle
				  may be considered a total loss with the written agreement of the owner . The
				  owner is the person or entity listed on the title to the motor vehicle if a
				  title exists.
4. If an insurer is
				  not retaining salvage, the insurer must notify the vehicle owner, in writing,
				  of the requirements for obtaining a salvage and reconstructed title.
5. Cash Settlements
a. A cash settlement shall be based upon the
				  fair market value of the motor vehicle less any deductible provided in the
				  policy, if applicable, including all applicable taxes, title, registration and
				  other fees incident to transfer of evidence of ownership of a comparable
				  automobile.
b. When the cash
				  settlement amount is affected by betterment or depreciation, the insurer must
				  support the deviation by documentation in the claim file by giving particulars
				  of the automobile condition that warrant said deviation. Any deductions or
				  betterment from fair market value, including deduction for salvage, must be
				  measurable, discernible, itemized and specified as to dollar amount and shall
				  be appropriate in amount. Deduction shall not be made for reconditioning or
				  dealer preparation. The basis for determining fair market value shall be fully
				  explained to the claimant. All information that is the basis for such reduction
				  shall be contained in the claim file and a copy of the valuation shall be
				  provided to the claimant.
c. If the
				  insurer in the process of adjusting a total loss makes a deduction for salvage
				  of the claimant's vehicle, the insurer must furnish the claimant with the name
				  and address of a salvage dealer who will purchase the salvage for the amount
				  deducted.