A new bill introduced in the New Jersey Assembly would require every auto insurer in the state to include appraisal provisions in their policies, giving consumers a formal path to dispute claim settlements they believe fall short of actual repair costs.
Assembly Bill 6106, introduced Nov. 24 by Assembly members Dan Hutchison and Cody D. Miller, mirrors Senate Bill 4534, which was introduced in May by Sen. Paul Moriarty and referred to the Senate Commerce Committee. Both bills would mandate that every auto policy includes a provision allowing either the policyholder or insurer to demand an appraisal by a "competent and disinterested appraiser" when they disagree on the actual cash value or amount of loss.
AASP/NJ backs both bills
The Alliance of Automotive Service Providers of New Jersey has been advocating for mandatory appraisal legislation and sees the two-track approach as an opportunity to build momentum.
"We got some support from a senator early on and he was instrumental in getting us hooked up with a couple of assembly people that wanted to take the ball and run with it," said Ken Miller, AASP/NJ president and owner of 821 Collision in North Haledon, NJ. "It will be our intention to focus on both sides and see if we can advance them both out of their committees and to a vote."
The bills come as insurers have increasingly removed appraisal clauses from their policies or deployed tactics to discourage their use, according to AASP/NJ. Miller said the problem has become pervasive.
"Recently, it seems like most claims are contested," he said. "As more and more insurers are trying to take this out of their policies, it's just a great tool that a consumer has to have it in there."
Miller emphasized that the push for mandatory appraisal is fundamentally about protecting drivers, not just addressing shop concerns.
"These are actual consumer issues," he said. "They need to be addressed as consumer issues, not shop issues. These are actually the motoring public that is being harmed by their carriers, unfortunately."
Closing a gap for liability claims
Both bills include language extending appraisal rights to third-party claimants, an uncommon provision nationally. Under current law, a driver filing a claim against their own insurer may have appraisal rights depending on their policy. But a non-fault driver filing against the at-fault party's liability coverage typically has no such recourse when the liability carrier's settlement offer falls short of actual repair costs.
The bills would change that, giving non-fault drivers a formal path to challenge lowball offers. For collision shops, this matters because it gives their customer — the non-fault vehicle owner — a tool to fight for enough money to cover the full repair.
Miller said the provision addresses a real gap in current law.
"It's not typical, I will say that, and we're hopeful that we can get that recognized…that it is an actual problem for third parties as well," he said.
How the appraisal process would work
Under both bills, once one party issues a written demand and names an appraiser, the other party has 20 calendar days to select their own. The two appraisers then have 20 business days to separately determine the actual cash value and amount of loss. If they cannot agree, an umpire, selected jointly by the appraisers or appointed by a court, issues a binding award.
If enacted, the law would take effect 90 days after the governor's signature and apply to claims made on or after that date.
Legislative push needs shop support
New Jersey would join a growing list of states that have moved to protect appraisal rights in law. Texas enacted mandatory appraisal legislation that took effect Sept. 1, and Washington passed similar legislation earlier this year. Rhode Island, Alaska, and Massachusetts already require insurers to include appraisal clauses in auto policies.
Miller said it may be too early to draw lessons from other states' implementations, but expects insights to emerge as those laws take hold.
For now, he urged New Jersey shop owners to engage directly with the legislative process.
"First and foremost, they need to get involved," Miller said. "AASP is doing what we can on our side to promote this legislation, but as it moves out of committee, and maybe even potentially to help it move out of committee, we need people to get in contact with their legislators in their area, to tell them how important this really is to the consumer."
