Rhode Island Enacts House Bill 7507 and Senate Bill 2681

Rhode Island has enacted House Bill 7507and Senate Bill 2681. The bills state that if an insurer refuses to honor a direction to pay that is executed by an insured or claimant to have the insurer directly pay the insured's property damage benefit to the restoration company of the consumer's choice, provided that the claim is no more than $5,000 and the restoration company is licensed, it constitutes an unfair claims practice.

Additionally, the bills outline that when a claim is settled or partially settled and the named insured is represented by a licensed public adjuster, then if directed by the named insured, the insurer should issue a check to the public adjuster for the adjuster's fee, but no more than 10% of the total settlement. The insurer should also issue a check to the named insured or others as specified, provided that the direction to pay letter is properly signed, dated, and filled out with the correct information.

Please see House Bill 7507and Senate Bill 2681for more information.