Strengthens consumer protections in insurance claims by expanding definitions of unfair claims settlement practices and clarifies an insured’s right to pursue bad-faith remedies.

Rhode Island Insurance Consumer Protection Bill

This bill strengthens protections for Rhode Island residents when dealing with insurance companies during the claims process. It expands the legal definition of "unfair claims settlement practices," meaning it broadens the list of behaviors that insurance companies are prohibited from using when handling a customer's claim. Examples of such practices typically include unreasonably delaying payments, denying valid claims without proper investigation, or offering settlements far below what a claim is worth.

The bill also clarifies the rights of policyholders — people who have insurance coverage — to pursue what are called "bad-faith" remedies in court. This means that if an insurance company acts dishonestly or unreasonably in handling a claim, the insured person would have a clearer legal path to sue the company for more than just the original claim amount, potentially including additional damages. This is meant to give everyday consumers more power when they feel an insurance company has treated them unfairly.

This bill primarily affects Rhode Island residents who hold any type of insurance policy — such as auto, home, or health insurance — as well as the insurance companies operating in the state. Policyholders could gain stronger legal footing when disputing claim denials or delays, while insurance companies may face greater legal and financial accountability for how they handle claims.

As of now, the bill has been introduced and referred to the Senate Judiciary Committee, which has recommended it be held for further study. This means it has not yet been voted on and is still in the early stages of the legislative process.