§ 27-9.1-4 - "Unfair claims practices" defined.
SECTION 27-9.1-4
§ 27-9.1-4 "Unfair claims practices"defined. – (a) Any of the following acts by an insurer, if committed in violation of§ 27-9.1-3, constitutes an unfair claims practice:
(1) Misrepresenting to claimants and insured relevant factsor policy provisions relating to coverage at issue;
(2) Failing to acknowledge and act with reasonable promptnessupon pertinent communications with respect to claims arising under its policies;
(3) Failing to adopt and implement reasonable standards forthe prompt investigation and settlement of claims arising under its policies;
(4) Not attempting in good faith to effectuate prompt, fair,and equitable settlement of claims submitted in which liability has becomereasonably clear;
(5) Compelling insured, beneficiaries, or claimants toinstitute suits to recover amounts due under its policies by offeringsubstantially less than the amounts ultimately recovered in suits brought bythem;
(6) Refusing to pay claims without conducting a reasonableinvestigation;
(7) Failing to affirm or deny coverage of claims within areasonable time after having completed its investigation related to the claimor claims;
(8) Attempting to settle or settling claims for less than theamount that a reasonable person would believe the insured or beneficiary wasentitled by reference to written or printed advertising material accompanyingor made part of an application;
(9) Attempting to settle or settling claims on the basis ofan application that was materially altered without notice to, or knowledge orconsent of, the insured;
(10) Making claims payments to an insured or beneficiarywithout indicating the coverage under which each payment is being made;
(11) Unreasonably delaying the investigation or payment ofclaims by requiring both a formal proof of loss form and subsequentverification that would result in duplication of information and verificationappearing in the formal proof of loss form;
(12) Failing in the case of claims denials or offers ofcompromise settlement to promptly provide a reasonable and accurate explanationof the basis of those actions;
(13) Failing to provide forms necessary to present claimswithin ten (10) calendar days of a request with reasonable explanationsregarding their use;
(14) Failing to adopt and implement reasonable standards toassure that the repairs of a repairer owned by or required to be used by theinsurer are performed in a workmanlike manner;
(15) Misleading a claimant as to the applicable statute oflimitations;
(16) Failing to respond to a claim within thirty (30) days,unless the insured shall agree to a longer period;
(17) Engaging in any act or practice of intimidation,coercion, threat or misrepresentation of consumers rights, for or against anyinsured person, claimant, or entity to use a particular rental car company formotor vehicle replacement services or products; provided, however, nothingshall prohibit any insurance company, agent or adjuster from providing to suchinsured person, claimant or entity the names of a rental car company with whicharrangements have been made with respect to motor vehicle replacement services;provided, that the rental car company is licensed pursuant to Rhode Islandgeneral laws § 31-5-33; or
(18) Refusing to honor a "direction to pay" executed by aninsured, claimant, indicating that the insured or claimant, wishes to have theinsurance company directly pay his or her motor vehicle replacement vehiclerental benefit to the rental car company of the consumer's choice; provided,that the rental car company is licensed pursuant to Rhode Island general laws§ 31-5-33. Nothing in this section shall be construed to prevent theinsurance company's ability to question or challenge the amount charged, inaccordance with its policy provisions, and the requirements of the departmentof business regulation;
(19) Modifying any published manual (i.e. motors, mitchells,or any automated appraisal system) relating to auto body repair without prioragreement between the parties;
(20) Failing to use a manual or system in its entirety in theappraisal of a motor vehicle;
(21) Refusing to compensate an auto body shop for documentedcharges as identified through industry recognized software programs or systemsfor paint and refinishing materials in auto body repair claims; and/or
(22) Failing to comply with the requirements of Rhode IslandGeneral Laws § 31-47-12.1.
(b) Nothing contained in subsections 27-9.1-4(a)(19), (20), &(21) of this chapter shall be construed to interfere with an auto body repairfacility's contract with an insurance company.
(2) If an insurance company and auto body repair facilityhave contracted under a direct repair program or any similar program theretothe provisions of subsections 27-9.1-4(a)(19), (20) & (21) shall not apply.
(3) If the insured or claimant elects to have the vehiclerepaired at a shop of his or her choice, the insurer shall not limit ordiscount the reasonable repair costs based upon the charges that would havebeen incurred had the vehicle been repaired by the insurer's chosen shop(s).