A New Jersey state senator recently introduced a bill that would require auto insurers to include in all policies written in the state the right to an appraisal by a third party in the case of a dispute over a repair estimate.
SB 4534 was introduced May 29 by State Sen. Paul Moriarty, D-4, and referred to the Senate Commerce Committee.
The bill would require every policy to include a provision allowing for a third-party appraisal if the policyholder and insurer disagree on the cash value or amount of a loss, including the repairable and total loss amount, of an automobile reported on a claim; or the offer of settlement to a third-party liability claim.
The bill allows either the policyholder or insurer to submit a written demand letter to the other invoking the appraisal provision. Both parties then have 20 calendar days to choose an appraiser and notify the other.
The selected appraisers will, within 20 business days, appraise the loss, stating separately the actual cash value and amount of loss, or the offer of settlement. If they can’t reach an agreement, a third party “umpire” or judge will be brought in to issue an award to one of the appraisers. The final agreement will be binding.
The Alliance of Automotive Service Providers of New Jersey (AASP/NJ) released a statement supporting the bill.
“The Right to Appraisal (RTA) is one of the few tools available to consumers when they disagree with their insurer over the value of a loss,” said AASP/NJ President Ken Miller, of 821 Collision in North Haledon, NJ. “In recent years, insurers have increasingly sought to reduce claim costs. At the same time, insurers have been removing the appraisal clause from their policies or deploying tactics to discourage its use. These actions leave consumers with little recourse and place them at a significant disadvantage during the claims process.
“This critical consumer protection ensures that policyholders have a fair and independent process to resolve disputes over claim settlements,” Miller added. “This legislation will restore balance by guaranteeing every New Jersey driver the right to invoke an appraisal process when disputes arise, regardless of which insurer they choose.”
Dean Massimini, AASP/NJ board member, of Autotech Collision in Sewell, NJ, is hopeful the proposed legislation will end the “take it or leave it” situation customers are in when dealing with insurance companies who have removed the clause from their policies, for example.
“Everyone should have the opportunity, just like with homeowners’ policies, to have a public adjustor come out and assess the situation,” Massimini said. He added policy holders have been taken advantage of for far too long and “this will hopefully give them a leg up by giving them an even playing field.”
Texas, Rhode Island, Oregon and Washington have all sought similar bills protecting the right to appraisal. “We all want to see consumers be protected and not be taken advantage of,” said Massimini.
