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by Elizabeth Reidy 

A series of property insurance-related bills introduced in the Rhode Island General Assembly’s 2026 Legislative Session could significantly reshape the state’s regulatory framework governing property insurance claims. Taken together, these measures would expand regulatory obligations and potentially increase exposure to claims related litigation. Each of these bills was referred to Committee and have been “held for further study,” enabling legislators to evaluate the testimony submitted and consider potential amendments. These bills include:

• B. 2204 and S.B. 2205, and their companion bills of H.B. 7515 and 7512, introduce new definitions, including “claimant,” which is defined to include third-party beneficiaries and assignees operating under assignments of benefits,” “insurance adjuster” and “insurance claim handling services.” These broad definitions require any person who evaluates, inspects, or offers opinions on damage, causation, repair scope, or replacement cost in connection with an insurance claim, regardless of job titles, to hold appropriate licenses and registrations.
• B. 2261, and the companion bill H.B. 7521, propose to overhaul Rhode Island’s standard fire insurance policy (R.I. Gen. Laws. §§ 270503 and 27-5-9.1). Among other provisions, these bills substantially alter the statutory appraisal process by expressly permitting appraisal where coverage is disputed, impose detailed qualification standards for appraisers and umpires, and require insurers to bear the costs of both appraisers if they initiate the appraisal process. These bills also define replacement cost value to include all necessary labor, materials, and compliance costs without depreciation, while limiting the application of depreciation under actual cash value. Moreover, they mandate that awards include 12 percent interest calculated from the date of loss. Finally, these bills increase the statute of limitations for non-fire or lightening homeowners’ claims to ten years.
• B. 2311, and the companion bill H.B. 7517, propose fundamental changes to “bad faith” liability in Rhode Island (R.I. Gen. Laws §§ 9-1-33 and 27-9.1-10), by removing the statutory requirement that there be a breach of contract prior to commencement of an action for bad faith. These bills also add a private cause of action for unfair claims settlement practices and authorize recovery of actual damages, attorneys’ fees, and enhanced damages of up to twice the amount of actual damages. These bills further re-define “unfair claims practices” to include, among other practices: (a) assigning, permitting or relying upon adjusters or agents who lack the training, education or experience reasonably necessary to competently investigate, evaluate, negotiate or settle the loss; (b) using any business entity not properly registered with the state of Rhode Island or up to date with required annual filings; and (c) failing to account for consequential damage when calculating replacement cost or actual cash value.
• B. 2312, and the companion bill S.B. 7516, revise the statutory appraisal process in Rhode Island (R.I. Gen. Laws § 10-3-6, 10-3-15). These measures authorize courts to appoint appraisers or umpires when a party fails to act or causes unreasonable delay for both the non-complying party and the umpire or third arbitrator. These bills also reduce the time frame to move to vacate, modify or correct an award from 60 days to 30 days.

Industry groups have raised significant concerns about these bills. The Rhode Island Insurance Federation warned that “[t]ogether these are designed to make Rhode Island look more like Florida in their pre-2023 reform era, where assignment of benefit abuses ran rampant and significantly deteriorated the property insurance market.” It further commented that, as a result of these bills, Rhode Island “would become a true outlier in not requiring a breach of contract to accuse an insurer of operating outside their duty of Good Faith and Fair Dealings,” which will “invite a flood of new cases from entrepreneurial attorneys, which will increase the cost of claims and thus increase premiums.”  

Likewise, the American Property and Casualty Insurance Association cautioned that the “ultimate goal of” the bills “is to empower practitioners of assignments of benefits (AOB) abuse”—while an “AOB can streamline the process from a homeowners’ perspective,” it is “also ripe for abuse as unscrupulous contractors may try to get as much money from the insurer as possible and complete the work for as cheaply as possible as they stand to gain the delta.” These bills, according to APCIA, “would make Rhode Island one of the top assignment of benefits abuse states in the country” and would “generate explosive additional costs for Rhode Island residents.”

These sentiments are echoed by the Rhode Island Joint Reinsurance Association (the RI Fair Plan), the National Association of Mutual Insurance Companies, the National Crime Insurance Bureau, the American Council of Life Insurers and Beacon Mutual, all of whom submitted written opposition to one or more of these bills. In addition, the Rhode Island Department of Business Regulation, the CRLB License Committee and others have submitted written opposition against these bills.

The written remarks in favor of one or more of these bills argue that the legislation is intended to strengthen consumer protections and claims-handling obligations. Notably, the only proponents of these bills are employed by New England Property Services Group, LLC, a Massachusetts-based storm restoration contractor that enters into home repair contracts and assignments of benefits from Rhode Island and other New England homeowners. 

Although these bills have not progressed beyond committee at this time, they warrant close attention from insurers operating in Rhode Island. If enacted—whether individually or as a package—they would materially shift the state’s insurance landscape, positioning Rhode Island among the more policyholder-friendly jurisdictions and increasing regulatory, operational, and litigation risk for insurers.